I have been thinking about our experience using kickstarter a lot lately. Now that we’ve had some time to reflect since our Kickstarter ended, I wanted to share some lessons learned and some updates.
We had nearly 100 people back our project on Kickstarter and pre-orders for 80 smart propane meters. That was confirmation that some propane consumers want to monitor their tank levels. But despite the interest and generous support, we were left shy of our funding goal.
How we set the $20k Goal
We tallied fixed cost (testing, certifications, legal, insurance, etc.) and variable costs (materials, assembly, and shipping) for 200 units. Larger quantities of sales are certainly expected, but we hypothesized this many potential buyers would see the kickstarter and back our project.
After kickstarter’s cut of 5%, our costs would be roughly $54k. Afterall, Fixed costs for testing and certifications, to ensure the device is completely safe, total $25k alone.
So the difference between the $20k we sought as our goal, and the actual costs of $54k means we were willing to take a loss of $34k. That’s the balance of my savings account (we’re bootstrapping!), so that’s the additional investment I could make to ship you this product.
A look at those final hours
In the final hours, we received several offers to bring us up to the funding goal of $20k. We received a few requests for equity in return for the remaining $8k we needed. We got some offers for loans.
I politely turned down those offers because I know that our team’s experience with energy tracking hardware and software – and the work we’ve accomplished – has a ton of potential.
I know we’re the right team to make a truly smart propane meter that empowers consumers. We’re the first to offer something more than a simple tethered meter and we are getting great feedback from our alpha testers.
Ultimately, we need to make a product that people feel irresistibly compelled to buy. Artificially boosting backing to meet an unprofitable funding goal is not only ethically questionable, but it’s ignoring a warning sign about product-market fit.
So shy of our goal, I looked back at our assumptions and what we learned since I started our company in August 2015. Our team is motivated to change the way the world consumes energy. Having the data to analyze how you consume and buy is valuable. Protection from running out is empowering! Afterall, you can’t manage what you don’t measure.
So with 8,000,000 households in the US using propane for heat, why weren’t more people compelled to buy?
Despite being a staff pick, only 1,300 people watched our full video on Kickstarter. Despite my love for crowd-funding, I wouldn’t call these platforms the world’s stage.
Perhaps the timing was bad. Right now, with extremely cold temps throughout the country, it’s more on the top of folks minds.
Perhaps most people think their propane supplier should be monitoring levels.
And the Good News
I’ll never know what percentage of the viewers of our Kickstarter campaign were interested consumers, but half a dozen propane suppliers saw it and reached out. They liked our product, and some placed their orders.
So we have been marching forward with engineering and testing the product. Prototypes have been refined. We’re user-testing and fixing our mistakes.
By executing this path, we’re covering a lot of our costs, bringing down costs for a consumer product.
We see more interest in our first product every day. Notice that I said first? In addition to getting close to being able to ship some units to Beta Testers, we’re doing some R&D on a fuel-oil tank monitor.