With two days to go in their self-run crowdfunding campaign, Scout Alarm is less than five percent away from its goal to raise $180,000 to produce its first run of digital, in-home security systems. Foregoing established crowdfunding platforms such as Kickstarter and Indiegogo, the team at Scout decided to raise the dough on their own, and in just over a month of fundraising, they appear to be on track to do so.
[ibimage==22958==Medium==none==self==ibimage_align-right]If Scout reaches their fundraising goal, they will ship products in August 2013. Currently, they are working on schematics and sending prototypes to the factories, and plan to review in July.
The question this raises, of course, is “How?” With so many turning to the widely known and trusted avenues of crowdfunding – heck, a Veronica Mars movie passed $2 million in funding in under 24 hours today – the do it yourself approach is certainly unusual.
According to the Scout team, Kickstarter was not an option since their project did not make them eligible based on the site’s rules. That’s why we talked to Lindsey Cohen, VP of Sandbox Industries, who introduced the product back in February. Read on to see what she had to say about her company’s approach to crowdfunding.
You're so close to your funding goal! In your own words, how did you do it?
Lindsey Cohen: The Scout team had an aggressive rollout plan in terms of press and leveraging social sharing to spread the word. It starts with press, though. Press feeds sharing opportunities. When you don’t have a platform as a company, and you aren’t using a service like Kickstarter with a built-in platform of users, press becomes key to the equation. Once we knew who we were going to contact and the angle we were going to take, the rest comes down to sleeplessly executing on the plan.
What, if any, mistakes did you make along the way?
Cohen: We made plenty of mistakes along the way and have learned a great deal from the experience. First, we didn’t talk to our backers often enough in the first two weeks of the campaign. We knew we would contact them mid-campaign and in the last week, but we should have started in week one and every week after that. Being able to leverage the extended networks of your early backers is a big deal. Second, we should have incentivized sharing more than we did. The referral contest we ran mid-campaign was highly successful and we wish we would have done it weekly.
What are the challenges of running your own crowdfunding campaign? The benefits?
Cohen: The main challenge, especially for a first product launch, is that you have to find a way to make up for the built-in platform of users you just passed on. That is tricky. We were able to do it with press and sharing. But, it is a gamble. If you can get your product of Kickstarter, do it. We didn’t qualify based on their new rules.
The other main challenge is that creating your own crowdfunding site is not plug-and-play like Kickstarter. You need to have a software developer who knows what they are doing. You’ll need to be able to have a small team that is able to devote their full month to the project. You may needs these things with a Kickstarter campaign as well, but the need is amplified when you are going it alone.
The benefits are three-fold. First, we were able to save 5% in fees ($9,000) that we would have been charged on a third-party site. That goes a long way in a startup! Second, we had a second angle on press coverage because, not only was the product interesting, but our approach to funding the product was pressworthy. Third, we were able to forgo spending time and energy on other backer rewards (t-shirts, stickers, etc.) and spend time focused on our product.
Will you try a similar approach for future products?
Cohen: Yes, we would definitely consider it now that we understand what it takes to pull it off. Crowdfunding has picked up a lot of steam in the past year. Entrepreneurs are finding new and innovative ways of applying this model. We can see ourselves using a similar approach to expand into international markets, or testing market demand for a more complicated add-on to the Scout platform.
What is your personal reaction to the success of this campaign?
Cohen: We are excited by the interest and support from backers and people associated with the industry. The response has been tremendous. We’ve received thousands of supportive e-mails and we’ve learned a lot in the process. Right now, we’re still focused on hitting our goal and working around the clock to make that happen. However, in the moments when we are able to take a breath, we’re proud of what this team has been able to accomplish in such a short amount of time. We’ll take time to reflect at some point, but right now any accomplishments are just the beginning of our sprint towards our August ship date.
Visit Scout's website, check out Sandbox Industries' BIC profile, and follow Scout on Twitter at @ScoutAlarm.
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