Daniel is the founder of two very successful crowdfunding ventures: WingStand (a connector for your tablet or phone to a mobile keyboard) and HandleBand (a mount for your phone for the handlebars of your bike or motorbike).
CE: It’s amazing that you’ve been able to raise so much money for some very simple products: $60k for the WingStand and $120k for HandleBand. Do you think there was really that much latent unmet demand for ways to attach your phone to things, or that people just saw it and figured “hey, that could come in handy.” and decided to purchase, or do you think people largely supported it to support you as a person and the story of your product’s creation?
DH: It’s a mix. Crowdfunding is definitely about supporting people. It’s a means of connecting with people whose ideas, goals, and projects you appreciate. For my first project, the WingStand, I think this was especially the case. I was a young kid with a cool idea and the drive to make it happen. The product was useful – before that point, few people had been using their iPads and smartphones with a physical keyboard – but I think the greatest motivation for a lot of backers was the knowledge that they were helping a young upstart succeed. There were people that pledged more money than a reward required, and people that sent letters after receiving their WingStand to further encourage me and my business/design work. With the Handleband the same sentiment was shared, though I feel that product was one people supported more for its utility.
Long story short, crowdfunding is built upon creative ideas and community support. Both must be there for a project to succeed.
CE: How did you end up partnering with Nite Ize for Handleband? Did your success with crowdfunding help you put together that partnership? (I own a bunch of their light up frisbees by the way! – D.P.)
DH: Yes it did. One of the nice things about crowdfunding is that it is a tremendous way to get your project into the public view. It’s also a great way to test the viability of your idea. Put these two together and you have the perfect environment for the type of partnership I made with Nite Ize. A backer referred my product to the company who in turn showed the CEO who contacted me to discuss working together. The world is small. With crowdfunding it seems even smaller.
CE: How were you able to get so much good press for your kickstarter campaigns?
DH: A hell of a lot of work. I would spend 5 hours a day doing nothing but outreach in order to get coverage by a few key news groups. Once you get this traction, it causes a snowball effect when blogs pick up on those groups then more outlets pick up on those blogs. To get the ball rolling though, it was nothing but hard work.
CE: How big was your team? Did you hire any outsiders or were you able to do all the videography, campaign management, PR, etc. yourself?
DH: (For the Handleband) There are friends I have worked with in the past who I collaborated with on the media content (particularly the campaign video). I also worked with a PR firm at the outset to try to land coverage with the upper-level, top-tier blogs. In the end, however, the vast majority of traction and content was generated in house. I had a few colleagues working with me hammering out email after email. By the end of the campaign we had a solid process together, which led to the hits which drove the campaign to success.
CE: How big was your budget to get your product and kickstarter off the ground before the crowdfunding money came in?
DH: I spent roughly $7,500 before the campaign on product development, video production, an upfront fee with the PR firm, and the assistance of several helpers prepping outreach for launch. Much of the agreements I had made were cash/revenue splits wherein I paid an upfront retainer fee as well as a percentage of funds raised on the Kickstarter campaign.
CE: Do you have plans or ideas or daydreams for future crowdfunding campaigns? Can you share some specifics?
DH: I have a few projects in the pipeline, but they’re under wraps for now. I’ll keep you posted as things develop.
CE: What do you see as the future of the crowdfunding industry?
DH: It will be very interesting to see how different types of crowdsourcing materialize. Equity based crowdfunding is a big trend. As more people see the value of having many investors (e.g. having 1000 small investors versus 2 or three larger funding sources) I think there will be movement away from more traditional sources of capital – particularly venture capital – and a gradual adoption of crowdfunding for company fundraising. I also think there will be a lot of opportunity for companies to explore the strength of crowdfunding beyond it’s financial merits. The mentorship, concept validation, and connections gained from a crowdfunding campaign can be incredibly valuable. Rarely however are they given the attention of financial benefits of crowdfunding.
CE: What are some up-and-coming crowdunding platforms that are on your radar?
DH: Angel List for crowdsourced fundraising. This is primarily for accredited Angel investors right now, but has the potential to significantly challenge the paradigm for traditional venture capital.
Quirky – I like their approach to crowdsourced product development.
CE: What do you think the potential is for Equity Crowdfunding once the JOBS act rules take effect?
DH: It has the potential to be revolutionary for all types of financing.
CE: What’s the long term plan for Dan Thompson, and Greg Lyon, and your Crowdfunding news and info site: HarnessTheCrowd.com?
DH: Harness the Crowd is a resource for people trying to crowdfund their ideas. As such, the long term goal is to further refine the resources we have listed, and build out the site so it can be an even better tool to help crowdfunders succeed. Kickstarter and Indiegogo are about helping people raise money. We’re providing an ecosystem to support people before they start their campaign and guide them once their fundraising comes to a close.
CE: What are some other great resources for Crowdfunding Info?
CE: What are some cool crowdfunding projects you’ve contributed to?