You’ve Successfully Crowdfunded; Now What?

You’ve Successfully Crowdfunded; Now What?

10-Jun-2016 by Matthew Hall

Up to this point the hardware startup industry has focused a lot of effort on getting products ready for crowdfunding, forgetting to mention what happens after a successful campaign. All of a sudden startups need to execute on manufacturing and shipping a product to backers, whilst leveraging the momentum of the campaign to catapult their startup into a successful and sustainable business. Planning and execution are vital at this point, so here are four key areas an IoT startup needs to focus on…

1) Deliver Great Customer Service & Communication

Backers will expect a certain standard of communication and service. You most likely gave a timeline on the steps you are taking to deliver your device as quickly as possible. However, like most companies making a physical product, things never go to plan and adjustments need to be made.

Many companies go silent or mislead people with their communications, but being transparent and honest with your backers (and in turn the media) is critical. A lack of communication and poor customer service can really hurt a startup’s chances of building a viable brand. Besides giving backers more confidence in you, your device, and your company, you will save much more time by communicating publicly to your entire audience through updates than trying to deal with a huge backlog of frustrated customers.

Consider doing a monthly or bi-weekly video or written blog that shows the steps you are taking to ship the product. Backers are usually very understanding of hiccups as long as they know what’s going on and that you’re working hard to get product in their hands.

2) Establish Additional Sales Channels

After the initial burst of sales that comes with a successful campaign, there is the mad rush of fulfilling product. This is incredibly important of course, but so is developing your post-crowdfunding campaign channels.

The fact is hardware startups are built to scale and this means that, in order to see the company at its fullest potential, you’ll need to start building out additional sales channels. It takes time to develop these channels. Often product or packaging changes are necessary to meet the requirements of certain buyers. Use the momentum of your campaign to get in front of those buyers quickly. Get their feedback early so you can minimize the time it takes to create sustainable channels (often the “valley of death” period where cash flow is so critical).

Consider looking into a sales agency to kickstart your go-to market channel strategy. They can help you with a sales and marketing strategy to sell to big box retailers and make the much needed introductions to the key decision makers.

3) Get Your Quality Control In Line

You usually get one shot. If you ship a faulty product to a new customer you’ll likely lose the loyalty of that person and all the people they tell. This is why it’s so important that the first production run you ship to backers has minimal defects and issues.

With connected devices many things can go wrong from the factory floor to the customer, from faulty firmware to bad batteries. In a recent article, a 3PL company called Rush Order stated that over 70% of the hardware companies they had worked with required significant re-work to the products that left the factory.

To mitigate this risk you’ll want to work with a partner you trust, or be there yourself, to develop and execute rigorous inspection on all outgoing products from the factory. It’s much easier, more cost and time effective, to fix problems at the factory than in your warehouse. Additionally, set up an inbound quality control check to ensure that what you receive matches the outgoing inspection and nothing gets damaged in shipping.

4) Establish Key Partnerships And Networks

Getting a successful hardware startup off the ground takes a great team and flawless execution. Since they are so many moving parts to a hardware startup it makes sense to tap into the hardware startup community to develop key partnerships for help and insights where it’s necessary.

An accelerator program like Startupbootcamp IoT | Connected Devices is a great place to start in optimising your road map. Many times a small course correction, change in messaging or market strategy can make all the difference between success and failure. You can also find a strong, focused community at Hardware Massive to connect with other startups and service providers.

Overall

Getting a sustainable hardware business off the ground takes a tremendous amount of effort, even after a successful crowdfunding campaign. There are a lot of steps to developing a product and getting it to market, and an IoT device can have a lot more complications than most manufactured products. The four points above should provide you with some clarity and direction to take your successfully crowdfunded startup to the next level, but always remember to keep learning as fast as you can and be prepared to make changes to your plan as you go.

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