How to have a successful crowdfunding campaign (in fact, one that raises 3,000% more than its target!) | #385

Tim Reid:
Interesting you mentioned before we went on air about Jack Gance an interview I’d done only a few weeks ago who was the founder of Chemist Warehouse. He too is a pharmacist but had this entrepreneurial kind of yearning that kind of led him to bring a whole lot of different brands to Australia before becoming our biggest retailer.

Rex Kuo:
Yeah, I listened to that interview it was a great interview. I actually worked for Chemist Warehouse. So, there was a lot that I could relate to and He is a great great businessman.

Tim Reid:
So, you and Charles are non-related careers your mates I’m guessing. Were you looking for like a business idea or did Orbitkey just come to you as a problem that you had?

Rex Kuo:
I think it was a bit of both. Certainly for Charles he was the one with the OCD with jingling keys like he used to go jogging and he hated jingling keys.

Tim Reid:
Love a bit of OCD. Always lead to an adventure.

Rex Kuo:
Well that’s right. That’s the best products are made. You kind of design for yourself.

Tim Reid:
Yes.

Rex Kuo:
He made a prototype for himself and he was using that for over a year. And then he showed it to me one day and I thought hey this is a great idea. And I remember at the time I just got a new phone and a new wallet and I was really conscious about putting my keys.

Tim Reid:
A bit of OCD yourself.

Rex Kuo:
I guess you can say that. I was really conscious about putting my keys in the same pocket as my phones and wallet. So, looking at other ways improve key caring and off we went.

Tim Reid:
So, was there a point there where you clearly weren’t enjoying pharmacy and Charles wasn’t enjoying his career so much that it was like this is what we’re going to do. You Orbitkey. The concept came to you and it’s like this is exciting it actually looks like no one else. Something no one else has done.

Rex Kuo:
Yeah, I think it was more we’re both looking working full time full time jobs and we were just looking for an opportunity to do something for ourselves like where we’re young and we wanted to start something and grow into something bigger. We started brainstorming different ideas in the child show me this early prototype and we thought that would maybe other people would like it too.

Tim Reid:
So you soar it. What made you think it was a really good idea? Because this kind of area fascinates me I always say like if Steve Jobs had told people about the iPod that we could throw away our c.d. and albums and have a little white box we’d go no way that’s a stupid idea. He didn’t listen to the people. I guess he didn’t often do that. Why did you think Orbitkey was a go?

Rex Kuo:
I guess when we started it we had no idea that other people would like it too. When we first started like when we’re designing it in fairness we weren’t designing it for other people. We were designing for ourselves to start with. We thought like no onegets this. At least we’ve got something that we will love using later on in development we so sharing with other people. And of course or naturally our family and friends told us it was good and they’re not going to tell us is no good. But it wasn’t until crowdfunding came along that there was a good opportunity for us to really test the market.

Tim Reid:
Okay, so OK let’s talk because we are here to solve the crowdfunding mystery or you’re certainly for me that’s why you’re here. First crowdfunding fascinates me. So, you decided that crowdfunding was both a way of validating the idea but also raising funds to bring it to market.

Rex Kuo:
Definitely yeah. When we spend nine months developing the product countless prototypes and finally we got to a stage where we had something that we were happy with. But when they had a launch at that time of crowdfunding just became starting to get popular overseas. There was a little bit of exposure in Australia not a lot.

Tim Reid:
2013.

Rex Kuo:
Yeah 2013.. And we thought this sounds like a great opportunity. We didn’t have to invest hundreds of thousand dollars into moulds and large minimum order quantities, we could test the idea to see if other people were like that too. It just made sense for us.

Tim Reid:
Why did you choose Kickstarter as a platform?

Rex Kuo:
Good question. We actually didn’t choose Kickstarter to start with. We went with another platform called Indigo and our campaign was all set up we were all ready to go and. We heard word that Kickstarter was launching in Australia. We’re going to open up to Australian careers and we thought Kickstarter has got a great brand. It’s got a great following and we knew that we’re going to do it there are an organic marketing as well and so we wanted to kind of write on them on that way. And we wanted to make sure that the day that Kickstarter was life in Australia that was the first day we were going to launch our campaign year and that’s what we did.

Tim Reid:
Well, clearly the numbers prove that it was a huge success for you. We’ll talk about that in a minute. But any regrets not going with Indiegogo upfront.

Rex Kuo:
No.

Tim Reid:
What’s the difference between the two because then there’s also gofundme there’s no shortage of crowdfunding.

Rex Kuo:
There’s a lot of different platforms and in fairness they all have great points. I guess the biggest difference between Kickstarter Indigo is that Kickstarter has all or nothing funding model. So, you set your minimum funding goal and if you don’t reach it then the money goes back to order back is Indigo go have an option where you can keep the funds even if you don’t reach your funding goal.

Tim Reid:
That’s the only difference?

Rex Kuo:
No, there’s other differences like Kickstarter Indiegogo actually started launch first Kickstarter probably focuses a little bit more on creative side of things. I believe they have a stronger brand.

Tim Reid:
How much do they take out of interest? What’s the cut?

Rex Kuo:
I think it’s around about 4 percent and then you’ve got your credit card fees which is 3 to 5 percent.

Tim Reid:
It’s pretty good business at about 4 percent I mean you made them a million bucks or more. I’ve seen some extraordinary ones where they’ve raised five 10 15 million dollars. So yes I think it’s a little platform.

Rex Kuo:
All together I think a few billion dollars have been raised.

Tim Reid:
Wow. So I really want to break down what makes a highly successful crowdfunding campaign. So, I think maybe the best way we do that because you’ve done three so far right. Yeah and you’re about to do a fourth in November. So, you’re learning a fair bit along the way. And as I said at the top of the show in your introduction I see these apps these amazing gaps between someone wanting $10,00and all of a sudden raising 300-400 a million dollars is like how did that happen? Did you under budget? Was the idea so good? So let’s break down what makes a really successful crowdfunding campaign.

Rex Kuo:
Great. Well that’s a big question.

Tim Reid:
You’ve got to know.

Rex Kuo:
There’s so much to it like to do a great campaign I guess to start with. You’ve got the product. It needs to relate to enough people I guess your product needs to be kind of people.

Tim Reid:
Just hold a bit. Because we’re about to be interrupted by Peter Hitchener from Channel 9 now. Welcome Hitch. We are in the middle of an interview but I think this is hilarious because you have your key ring?

Peter Hitchener:
You have got half my key ring with me.

Tim Reid:
You have minimized your caring listeners a past guest Peter Hitchener who has just walked into the studio because I have seen his coverings previously in which you would normally carry a lot more. I kind of. Where have they all gone.

Peter Hitchener:
They’re in my office at the moment just sitting quietly on the desk because I’m out of the showgrounds after the last day of the Royal Melbourne Show and I feel I’m not going to cut around all those keys. However, now I discover there is a different way.

Tim Reid:
You would normally carry 20-30 keys. This is Rex by the way

Peter Hitchener:
Hi Rex. Good to see you.

Tim Reid:
And Rex has invented that. Look at that. That is the Orbitkey.

Peter Hitchener:
That is amazing.

Tim Reid:
And it does expand doesn’t it, Rex? In order to accommodate more keys.

Peter Hitchener:
Where do I get one?

Tim Reid:
Can you give me one of those.

Peter Hitchener:
No no no. I have to pay for it. But thank you, Rex.

Tim Reid:
I think we might have solved a pocket problem for you. Goon on you. Have fun.
So, Rex I was asking about what makes a successful crowdfunding campaign? Many many components. One point I wanted to pick up on was you start with a great product which is you like I think many people may not do that. They kind of get excited by a particular platform and then they just get it on their.
Rex Kuo:
Yeah I think you need to have a look at what’s already out there and see if you can solve a problem to start with. It’s a very competitive market. Find a product that is a little bit different from what’s out there. Find a problem and then try and solve that problem. OK. But that’s only one tenth.

Tim Reid:
Well, let’s break it down. Let’s break the other nine tenth because I think it is I mean like any marketing sometimes stuff looks so easy like. My analogy would be Facebook ads. I would just run some Facebook ads but a pay per click just need a picture and a headline some copy. No. You need a really good image. Yes you need a really good headline and it does take work. I don’t want to scare my small business listening audience away from doing these things. But it’s important to know there’s components to get right. So, that’s right. Back to you.

Rex Kuo:
So, once you have the product you’ve got to get the campaign ready. So, a typical campaign is you have a video followed by a description of a page like just like any landing page or website. That video is probably the single most important asset of your whole campaign.

Tim Reid:
Let’s talk video. Yes. Because again I’ve looked at a lot of crowdfunding campaigns and there are some very very cool videos there. I think your second video for Orbitkey was particularly good with the Irish guy. We had a little bit a dollar Shave Club about it.

Rex Kuo:
We’re trying we’re trying to go down a different vibe for the second campaign. I think there’s no definite right way to do a video. But it is important to have the video. You only have about 15 to 20 seconds to capture someone’s attention. If you don’t interest him enough for them to watch the rest of the video they’re going to move on to the next campaign.

Tim Reid:
So your first video, would you obviously outsource that?

Rex Kuo:
Our first video was quite basic we had a friend of ours who studied photography and he had a nice camera. We invited him to follow around for a day or two and we shot the video.
Just for a day.

Tim Reid:
You scripted it?

Rex Kuo:
Yeah, we did it all ourselves. We didn’t get someone to help but we write it all ourselves and everything and we didn’t have a lot of budget for our first campaign. You mention Kickstarter was a great way for us to launch it without spending lots of money and in fairness you don’t need to put Paul in the whole production can’t really get the video.

Tim Reid:
But the video is critical. One thing I noticed about good videos on crowdfunding campaigns I’ve seen that it includes the founder at some length because at the end of the day you’re asking people to give you money for something that doesn’t exist but is the founder’s idea. So the founder looks like a bit of a duffer.

Rex Kuo:
You want to try and show up in the video somewhere just because they do it as a people or you’re trying to get a product made bring a product to life and people are putting their money up to make that happen. They want to know who they’re supporting. They want to believe in your product and believe in your story. The best way to do it is just to show yourself in light be vulnerable let them know this is what the findings.

Tim Reid:
In your videos were going for about five minutes which there is a bit of school of thought that goes that’s too long. Which sounds ridiculous.

Rex Kuo:
Yeah. Our second video was a little bit long. We shot so much content that it was hard to cut. Our first round was actually seven minutes and then we got to five minutes. But we tried to put the most important stuff like at the front and then people dropped off then at least they’ve gotten most of the most important.

Tim Reid:
Out of interest, do you have some analytics attached to that video to see where people were dropping off?

Rex Kuo:
Yes. I think half the people didn’t finish the video like they’re halfway there.

Tim Reid:
Which means these guys go on for far too long. OK. So we need a good video. You then talked about description so just some copy what you’re saying.

Rex Kuo:
The copy is essentially just what’s on the video. A bit more detailed form you want to explain what you’re offering and what are the rewards. If you have someone backs you on your campaign what are they getting in return. That’s one side of the campaign so that’s about I guess converting someone when they get to your campaign. But that’s only half of it. The other side of the campaign a lot of people make the mistake is that they create this great campaign, this great video. They click the launch button and then they expect to the back is to just come in and they’ll be able to see your campaign but it doesn’t work like that anymore. You need to be able to drive your traffic to the campaign.

Tim Reid:
Okay hold that thought. Yes you just very simply skipped over the idea of rewards. But surely and I’ve again I’ve seen crowdfunding campaigns that have one level of a reward which is early release of the product at a discount and I’ve seen crowdfunding campaigns in fact I think all but key might have had seven eight nine levels of rewards.

Rex Kuo:
Our reward level is quite complicated.

Tim Reid:
But it wasn’t too complicated because it worked.

Rex Kuo:
Reward basically we’re crowdfunding. People were backing your projects so you want to give them some sort of incentive for backing that project for us because we’re a product design company for backing our projects. You would get that product and you would get it first before anyone else in the world. And normally at a discount as well. I guess that’s their incentive to want to back the campaign. We try and do things a little bit added a little bit more sweetener I guess like say we’re at the start of the campaign we would have early birds so save we might have said like you know 100 Orbitkeys at a special early bird price. Just to encourage people to join a campaign early and one of the reasons for that is the way the crowdfunding campaign works. The algorithm like it’s the first 24 hours of the campaign is so important like you need to be able to drive traffic to that campaign in the first day to get back in the campaign the first day and then it was one more chance to pick up.

Tim Reid:
I want to just get finished rewards was a clear marketing is the other side of this coin that you’ve got to drive traffic to but with your awards you do you think he did too many? How many did you have? How many levels of rewards?

Rex Kuo:
I think we had about 10.

Tim Reid:
10 at the end of your campaign and again it was a successful campaign so we can’t knock the fact that you had 10 levels of rewards but did an 80/20 rule apply where 80 percent of your income came from 20 percent of those.

Rex Kuo:
It did yeah definitely it did. We offered different rewards because we have a few different material styles materials at different price points. So we had no way to do it like we had to offer different rewards for all the different products that we’re offering. So at the base we had early birds and then we had the reward for each different style and then we try to throw in like a little bit a few Hail Mary’s I guess like we had like an insider’s pack. So if you back a certain amount of money you would get access to the next four or five products before anyone else. So that’s coming up now. Look we’ve got new products coming out so those guys will get it for us.

Tim Reid:
So what was the most popular level of reward?

Rex Kuo:
It was a leather Orbitkey.

Tim Reid:
So how does that translate to someone listening wanting to do a crowdfunding campaign. What’s your advice on rewards on coming up with the levels.

Rex Kuo:
Sure. I would say price to be really careful about pricing your rewards. I think about what your end you’re after crowdfunding what price there will be and what sort of discount are you willing to give your back to incentivized and to join a campaign early. Don’t make the mistake of make them giving too much discount and then getting burned with shipping expenses later on. We did that in our first campaign. You want to make sure that it’s clear like the reward that you’re offering is crystal clear.

Tim Reid:
Don’t be clever. Spell it out.

Rex Kuo:
Write in the description exactly what it’s for. We have a little table in our page that shows you in image form if you pledge this amount of money you will get this in return.

Tim Reid:
Yeah that’s in your description. I love it. So Rex, we have got a great video. We’ve got well written copy for the description. We’ve got a number of levels of reward. That’s the campaign we missing any component of the on-page campaign.

Rex Kuo:
No, I think that’s pretty much it.

Tim Reid:
People hit the button go. Yeah I’ll have that level of reward. Hand their money over to I guess Kickstarter at this point in time. You hold the money until the campaign is finished. But right now as I could understand it that campaign that you’ve just beautifully created is a needle in the Kickstarter haystack.

Rex Kuo:
It is and more and more so. When we launched black market.

Tim Reid:
Welcome to Marketing.

Rex Kuo:
When we launched our first campaign it was a lot easier we could we could expect organic traffic from Kickstarter but now not so like that you would definitely get lost if you don’t try and drive your own traffic.

Tim Reid:
So I imagine there’s two levels of marketing a kickstarter a crowdfunding campaign. There is the platform you’re on. They might feature you. Are there little buttons you can take like eBay to get a bold listing or featured listing.

Rex Kuo:
No. They’re pretty secretive like they hand curate like Itunes.

Tim Reid:
Oh man! Itunes if you’re listening can you just feature the Small Business Big Marketing Show on page one? That’d be really nice. So the hand curating products that they see, that’s pretty cool. Let’s put that on our home page. Did that happen to you?

Rex Kuo:
It didn’t happen for us. We tried very hard. We try to reach out through like with subtle hints like ask them feedback about our campaign. That they can feature us.
But in the first campaign because it had relatively strong traction at the start it became a popular campaign so it was they naturally do feature popular campaigns like higher up and in the searches.

Tim Reid:
OK. So when you say you got a lot of traction at the start the first 24 hours you got a lot of page visits and a lot of people you’re saying yeah I’m in. So then, Kickstarter algorithm is going to hang on something going on over the Orbitkey page.

Rex Kuo:
Yes, exactly like the first 24 hours that was really important for us.

Tim Reid:
So, what did you do?

Rex Kuo:
Well you know early on in the campaign this pre-campaign we’re a bit nervous about sharing the campaign. Obviously it’s a new concept a new product. We didn’t want it to. We don’t want someone to take our idea I guess. But we made the decision to share it anyway. So a few weeks before the campaign five six weeks before we try to generate excitement for the campaign and we spoke to as many people as we could. Family and friends asked for their opinion. I asked them to their thoughts on the product because we find that when people. When you ask for their opinion and you listen to them and you make implementations based on what they say. They also want you to do well by. They feel like they’re this is part of their campaign. And this is kind of how the whole crowdfunding works in a way like it’s about and building the community you know. They want to see your campaign do well. They join in so you can as I could come to life. So we shared the campaign before Kickstarter as much as possible get people involved. We try to. We created a Facebook page in our landing page just to get people’s attention started showing behind the scenes. Remember the little teasers about the product.

Tim Reid:
So you’re revealing the product you’re talking about the fact that this is the problem solved. Here’s some prototypes here some people’s thoughts on it. Getting some feedback via comments and sharing and all the time saying hey listen on such and such a day it goes live on Kickstarter and you can be a part of it is that the kind of spirit?

Rex Kuo:
Yes.

Tim Reid:
OK. I was going to ask at that point what do you say to people listening I just spoke to a guy earlier today who has got an idea for a product.
Rex Kuo:
I think you have to tell them you have to tell people like you want to get people’s opinion and they might be able to help you.

Tim Reid:
How did you protect yourself legally?

Rex Kuo:
You know what. Like we didn’t want to give advice.We were given at the start you can go out and spend thousands and thousand dollars on a patent. But all it takes is a small design change and they can get around it anyway. And even if they do try and copy your product are you going to be able to protect it. Are you going to have the funds to protect it. So you’re far better off just trying to build a strong brand and a strong following they might be able to copy some of your products and some interesting look but they’re not going to be out of coffee or you’re following they’re not being a copy of your brand.

Tim Reid:
Well I love that people can copy what we do but not who we are is one of the great quotes around branding. I’m sure there’s another Orbitkey out there now, is there a competitor?

Rex Kuo:
There’s a few.

Tim Reid:
Not as good. How is your reaction when you saw the first one? The first competition.

Rex Kuo:
It started off like the first day. There was a lot of high fives because we got the Kickstarter app and it go off every few seconds here and a lot of high fives and excitement and somewhere during the campaign to defeat it we started to get a quite nervous because all of the sudden we had 5000 back is that we had to make the product for it’s a real downer.

Tim Reid:
Totally. My question earlier was like about competition. When did you first see someone trying compete?

Rex Kuo:
When we delayed that campaign from Indigogo to Kickstarter. There was another key organizer that actually launched during that time. They were really successful. But that throws off a little bit. I have to admit. But we carried on like it wasn’t exactly the same product so we were happy to keep going and we thought our product still offered a lot of advantages over the air.

Tim Reid:
Ok so a bit nervous but at the end of the day they’re probably building the category of key management systems versus competing head on with Orbitkey. So you run your first Kickstarter campaign. Great video great copy great levels of rewards. Great marketing building excitement weeks out from the start of the campaign 24 hours in. You’ve got a lot of buy in. You’ve got a lot of interest things are going well, 30 days later. Is that the campaign?

Rex Kuo:
Yes the first campaign.

Tim Reid:
I got my numbers right here he had 5000 backers you’d raised $210,00 dollars if you wanted 10 grand. It’s a high five! Give me one now.

Rex Kuo:
There was a lot of those. It was exciting. We spent 9 months making this product. We loved it but other people were going to like you and we’re grateful that people did. It wasn’t expected to like it.

Tim Reid:
So what did you do? You got your 200 now where you got 210 grand less 4percent.

Rex Kuo:
The project was funded I think we raised about 16000 on the first day. I joked to Charles and I said what would we what would it take for you to quit your job to go and do this full time. And he said $200,000. That was still on the first day and we just laughed it away like that’s never going to happen and then near at the end of the campaign sure enough we know where $200,000 dollars and then we got our jobs then we went over to China and we lived there for three to four months just to get the product made.

Tim Reid:
He stood by his word, Charles. You’re out of there. When you were out of there at like 15. No no

Rex Kuo:
Actually, it was Charles who quit before me. I think with pharmacy I was lucky that I could still do it part time and you know and you know keep my registration work on the weekend.

Tim Reid:
So you literally did. You got your money and you headed over to China.

Rex Kuo:
Yes.

Tim Reid:
Did you have contacts in China that you were going to build this thing?

Rex Kuo:
Yes, so before the campaign we try to talk to different manufacturers get an idea of costing. So we did have a few different connections and in warehouses when we went over there and we flew over there. Some of those people didn’t turn up quite like what they described they were going to be some horrific stories.

Tim Reid:
I don’t know whether it’s urban myth but I’ve heard of someone getting something manufactured over in China. The boxes arriving in Australia feeling quite heavy as you would hope they would with the product in it but the product inside were bricks.

Rex Kuo:
I’ve heard heaps of those stories but it didn’t quite happen like that. Some of the people that we were talking to that they definitely weren’t quite as big as we’d hoped that we’d be. And you know we had to scramble when you start looking for different suppliers and to find people.

Tim Reid:
Do you speak Chinese?

Rex Kuo:
A little bit. Not very well. Charles can read I can talk.

Tim Reid:
So, between the two of you, you get by being over there must be a huge advantage because many obviously don’t have that. Two seniors blokes you’re off and about ayes you can do. So you go over there. You bring it to life. And four months later you’ve got Orbitkey to market.

Rex Kuo:
Exactly. When we first went over like we didn’t plan to stay there for that long. We had a three we had a return ticket for three weeks later.

Tim Reid:
Was it good that you stayed longer?

Rex Kuo:
We had to. After the campaign we told our back is that we’re going to get a little bit on in March the following year. And I read a stat recently that 80 percent of Kickstarter projects don’t get delivered on time. We delivered ours on the last day of March. So we wanted to be in there.

We didn’t want that campaign to be just like the one campaign. We wanted to do follow up can parents. We wanted to create a community so we felt that we had a responsibility to get that product. I mean when we went over there you know we’d be one school then another and the mould would break or the sample wouldn’t come out right. But eventually we got there in the end.

Tim Reid:
OK. So version 1.0 of Orbitkey is launched in what are we going to talk sort of 20 late 2014. Was that it an online sales or did you wholesaling department stores or where’s the distribution?

Rex Kuo:
So after that, we sense to kickstart it back as we started to go down the traditional route of any product we’ve worked off our own e-commerce website. We started working with great stores around Australia and we started working with distributors overseas as well.

Tim Reid:
How do you balance that because when you go to like a talk of like a Myers or a David Jones and you say to them hey we’re also selling online. Do they go well? No. You either us or them it’s us.

Rex Kuo:
Most retailers are quite understanding of that kind. We haven’t had anyone ask for exclusivity in terms of online. They do ask for exclusivity in terms of areas like no one likes to stock the same product on just a few doors down.

Tim Reid:
So did you take it on yourself, Rex to get distribution?

Rex Kuo:
Yes.

Tim Reid:
Just it knocking on doors?

Rex Kuo:
Yes speaking to people and you know just finding other countries like who who are in that country would be interested in our product and who has the network that would be able to you know share it with a lot of different stores.

Tim Reid:
Yeah. OK. So that was just a grunt work. I’ve got a guest coming up over the moon which is a vegan ice cream must taste terrible. But again you know they’re in now they’re in Woolworths now. But the first 500 outlets was literally knocking on independent supermarkets store doors of individual stores and it’s just great work. You just gotta get out there.

Rex Kuo:
Yeah. we did trade shows. We went over to New York and did trade shows we did trade shows in London.

Tim Reid:
It was that valuable?

Rex Kuo:
It was expensive. But we built a lot of connections and from there it would it lead to you’d meet one person and he asked and do you know anyone else. And then it goes from there.

Tim Reid:
That’s amazing. So New York London trade shows hoping to get global distribution obviously you were going there for Australia.

Rex Kuo:
No we were going there.

Tim Reid:
What was the biggest win out of going to a trade show in one of the big cities in the world.

Rex Kuo:
I think it was just about meeting other distributors for example in Europe meeting other distributors we have a great distributor in Scandinavia in Netherlands. We have a great partner in Ireland. It’s just meeting potential people. It doesn’t take us one opportunity to meet.

Tim Reid:
So true. So by the way listeners I I’m speaking to Rex Kuo who is the co-founder of Orbitkey and a crowdfunding genius as it’s proving now we’ve only got to Orbitkey version 1.0. You then went back into the crowdfunding marketplace in 2016 with version 2.0 with a better product.

Rex Kuo:
So, we took everything we learned over that two years. We had a lot of feedback good ones as well as bad. We put it into a second version of our product and once again we needed to launch it and we went back to what we know best which is Kickstarter. Two years there’s a lot of things happened in two years. It was a whole different landscape our first campaign when you launched the campaign there’s still a chance that people would find it organically. The second campaign was a lot different.

Tim Reid:
The haystack just got a whole lot bigger and no advantage of being there previously and having success outside of knowledge.

Rex Kuo:
I think you get advantage in terms of the community you’ve built along the way.

Tim Reid:
So second campaign on Kickstarter. You’ve got a better product, you’ve got a bit of video really good video. It’s quite funny it’s a little bit long but that was proved by a lot of fun and obviously professional actor of sorts. Did you script that or you had someone else right at this time?

Rex Kuo:
No. One of the guys on our team wrote it read it ourselves.

Tim Reid:
It was fantastic. So we got a really lovely idea about and some nice humour. Yes. So great video levels less levels this time reward levels.

Rex Kuo:
No we still had a lot of products but not by choice.

Tim Reid:
What did you do differently from a marketing point of view. Anything.

Rex Kuo:
Oh there was a lot that we did differently. Like we learnt a lot over the two years on different marketing. This time we actually try to build our e-mail database in the lead up to the campaign and that’s probably the number one marketing advice I would give any new or anyone interested in crowdfunding campaigns like building that initial marketing e-mail database is so important.

Tim Reid:
Why?

Rex Kuo:
Because the first 24 hours you needed people to to come back to their campaign. When you launch so to make a big splash in the water so everyone’s could pick up.

Tim Reid:
I think that e-mail is massively underrated I mean do you live in this world of social media. I think we got to remind ourselves that from a social media point of view Facebook and Twitter and LinkedIn desperately want us to be there but they don’t want to give away too much to their holding our followers hostage. Until we give them some money. To boost that post yes even then it’s like you go from 1 percent to 3 percent and then just spend hours with your e-mail. That’s assuming it’s a clean list. There’s 100 percent attention.

Rex Kuo:
That’s right and I think e-mail is it’s not just about building an email list as well. It’s also about the value of their home. Like who are you getting to sign up to their email list. Sometimes you could run like a sweepstake competition and you just get a whole bunch of different emails from random people they’re not interested in your product.

Tim Reid:
Just want to win a prise.

Rex Kuo:
That’s right. And that’s not valuable.

Tim Reid:
So how did you build your list?

Rex Kuo:
Landing page to start with. We had a four week campaign we started with a landing page. We on social media we would share little teasers and snippets of our product. We review more and more in the lead up to the campaign. We try to cross promote with other brands out there and like minded brands not key chain brands but like a wallet brand

Tim Reid:
Or with delroy or any of the big wallet kind of oh.

Rex Kuo:
We would have liked to.

Tim Reid:
Did you tap them on the shoulder?

Rex Kuo:
You know they were nice enough to offer us some great advice.

Tim Reid:
Okay, again tell me if I’ve got my numbers right. Campaign 2 version 2.0 of Orbitkey 14,200 backers. Yes a million and eight. Well I got to say that $1,008,000 and you exceeded your goal by 3,000 percent.

Rex Kuo:
Yes.

Tim Reid:
That’s ridiculous. Extraordinary. High fives everywhere.

Rex Kuo:
Now there was a lot of high fives around the office. That was for sure. It was supposed to be easier but it still felt like a lot of work because at that time we were running our normal distribution our wholesale and online business was done. We got this Kickstarter campaign is like having double the workload all of a sudden

Tim Reid:
Oh you poor thing. I’m really sorry to hear that. If you could only do it again. Less backers less money. That is a good outcome. So that then allowed you to take the product to another level but then you did something that I can’t quite figure out where this piece fits. You did a second version of the campaign with Indiegogo in demand which is there kind of like you were explaining.

Rex Kuo:
After you have finished your crowdfunding campaign whether it’s 30 or 60 days, you still need the funding stops at that point. But at that point your product is not ready to be delivered straight away. You still have to get the product made but at the same time people are still missing out on a campaign they’re still interested in the product. So Indigogo in demand is kind of like the half ways sort of transition product between crowdfunding and taking online orders on your website. Okay. So that allowed us to continue to take orders.

Tim Reid:
And kick started it and have a version of that?

Rex Kuo:
No they didn’t.

Tim Reid:
And how much more did you raise? That’s all included in the million?
So where’s Orbitkey today? Wrap some number around. Staff turnover.

Rex Kuo:
So we have a great team. There’s 12 of us in the business we have guys in Australia we have a guy in New York and we also have someone in China as well.

Tim Reid:
Full time?

Rex Kuo:
Yes. So 12 full time staff. Our products are sold to 140 different countries around the world. So

Tim Reid:
How many do you sold?

Rex Kuo:
We’ve sold just over 200,000 key chains I guess.
We’d like to say we’ve converted 200,000 nearly 200,000 key chains.

Tim Reid:
What did they retail for?

Rex Kuo:
So depending on the style it could be $35 to $45.

Tim Reid:
$200,00 doesn’t seem like a lot. I say it with respect. Are you disappointed by that number?

Rex Kuo:
We’re okay. We’re growing a community and we’ve got a great team behind us.
Now we’re we’re happy.

Tim Reid:
You keep under budgeting what your budget for the next 12 months? How do you want to sell a million?

Rex Kuo:
I think in it next 12 months, we want to keep selling the same product we wanted to come up with a full range of different products and that’s where the next campaign comes in.

Tim Reid:
Your online sales vs. retail sales. What’s the kind of split?

Rex Kuo:
Probably you know our online is probably about 40 percent everyone. So we’re really strong in wholesale distribution.

Tim Reid:
What do you prefer? So as a sale.

Rex Kuo:
I think you know it’s there. A sale is a sale. It’s different like distribution obviously is less work for us. Someone else is doing the work but it’s less margins rehearse on line you know you get full margins.

Tim Reid:
Great story, Rex. How do you feel after leaving pharmacy 4 years ago and embarking on sort of an unknown half proven on a on a crowd one off the back of one crowdfunding campaign.
But how do you feel now?

Rex Kuo:
Sometimes you know I wake up and I think well like. I still have a lot of friends who are doing pharmacy we catch up and it’s just I don’t I’m not sure how we ended up over here. It is a complete different direction of how we started and it feels great.

Tim ReidL
Well done buddy. Thanks for sharing. Take us behind the scenes of a crowdfunding campaign because I’ve always wondered for so long how that gap. Clearly you under budgeted with what your expectations were. But still you’re raising of those funds and I think my learning there is that maybe a great starting point is just having a really good product. A good place to start. Anyone else thinking of crowdfunding any last bit of advice before we finish up?

Rex Kuo:
Do the homework. Don’t just click launch too quickly. Make sure you build that email list and speak to people as well like there’s a lot of information out there. Like this podcast I guess like the yellow did do the work. Don’t just jump into it straight away like do your homework.

Tim Reid:
Good on you! Thanks, Rex. If someone wants to know Orbitkey, Where do they go?

Rex Kuo:
Just on the website. Orbitkey.com.au