w/ Vance Lee, Playground Theory
In this episode, Kurt Elster sits down with Vance, a crowdfunding expert, to explore the strategies behind successful Kickstarter campaigns. From understanding your target audience to refining your product presentation, Vance's advice is a goldmine for aspiring entrepreneurs. Whether you're new to crowdfunding or already running a Shopify store, this conversation will inspire you to take your ideas to the next level. Join the crowdfunding adventure now and learn the secrets to launching with confidence!
The Unofficial Shopify Podcast
Kurt Elster: Hello, my friends, and welcome back to The Unofficial Shopify Podcast. I’m your host, Kurt Elster, A.K.A.:
Ezra Firestone Sound Board Clip: Tech Nasty!
Kurt Elster: And this is The Unofficial Shopify Podcast. We’re the show that unravels the mysteries of eCom, offers insider tips, and stirs up fascinating stories from the Shopaverse all for you, our beloved Shopify entrepreneurs. And today, we’re gonna venture into the attractive world of crowdfunding. It’s a powerful misunderstood strategy that lets you launch a product without a hint of inventory. Sounds too good to be true. You’re about to find out just how possible it is.
We’re not alone on this journey. I am joined by the one and only Vance Lee, an eCommerce entrepreneur with 13 years’ experience in brand growth and marketing, and since venturing into Amazon FBA in 2015, he’s crafted a winning formula for crowdfunding and the preorder launch strategy. This is not just a claim, because he can back that up. He’s scaled brands, launched products that have collectively raised over $7 million, and he holds two record-breaking launches, both ranking number one most funded in their respective niches, and sitting pretty in the top 1% of crowdfunding projects of all time.
Let’s see what knowledge on crowdfunding we can gain here. Welcome to the show, Vance. How you doing?
Vance Lee: Doing amazing. Excited to be here.
Kurt Elster: So, Vance, where are you located?
Vance Lee: I’m originally from Canada but right now I’m living in north of Thailand, in a city called Chiang Mai, so it’s a mountain city in the north of Chiang Mai.
Kurt Elster: So, you’re living that full-time digital nomad life. How long can you stay in one place before you’re no longer a nomad and you just live there?
Vance Lee: Good question. I think we need to create like a nomad handbook or something for this. But for me, I’ve actually started to slow down my traveling, so instead of… At the beginning, it was like a week, two weeks at a new place, and just constantly traveling. Now, I’m at a place for at least three months and I’m really enjoying kind of this slower pace of traveling as a nomad.
Kurt Elster: Okay, and doing everything online, and I would imagine entirely remote is what enables this.
Vance Lee: Exactly. So, my team’s remote, and everything is remote.
Kurt Elster: And so, you’ve got… It sounds like you’ve got at least a decade experience here. Is that right?
Vance Lee: Yeah. I mean, eCommerce, about eight years, and before that, marketing agency experience. I had a video production agency in Toronto, worked on brand campaigns and a lot of interesting stuff, but that was very localized to Toronto before I branched out to the online business, the online world.
Kurt Elster: How did that eCommerce journey start for you?
Vance Lee: I had a friend that was selling products on Amazon, and he made it sound super easy, and I started doing research online, and all those people made it sound super easy, as well. So, I thought, “Okay, well…”
Kurt Elster: Was it super easy?
Vance Lee: I mean, it definitely was not super easy. There was a lot of work involved, a lot of figuring out so many details and things that all the courses and the gurus don’t tell you about, so jumped into it and it was actually a lot of work. It was way more work than I expected. But I was able to make it work. My first product was this kind of like really quirky product. It was silicone wedding rings. It was just like a random category at that time. I’m doing research on Amazon. And silicone wedding rings were essentially wedding rings that you would wear if you couldn’t wear a normal wedding ring if you worked in construction, or something dangerous, or if you’re an athlete.
Kurt Elster: You don’t want to get your finger degloved.
Vance Lee: Exactly. So, this category was a really interesting category that had a lot of… It was really low-price products, so it was like pennies to make this ring made out of silicone, and what I did was I just took the… I looked at this category and said, “How can we make this better?” The product itself was like 4 to 5 cents. Me and my business partner, we decided to make them a box that looked like a really sexy ring box, and so we’re really into branding, and we’re really good at that stuff, so we made a box that cost $1.04 to make, and we put this ring right in the middle of the box, and we sold it for $20, whereas all the other people that were competing on Amazon were just selling just the rings themselves, putting them into a plastic bag, and so we did a really good job with the branding stuff.
And we just dominated that category for quite some time before we decided to not sell in that category anymore. So, that’s how my Amazon journey started.
Kurt Elster: What year was that?
Vance Lee: 2015.
Kurt Elster: Still easier then, less competitive, but definitely not not competitive. Did you at any point consider going, “All right, let’s move out of Amazon, build our own brand, or try other channels?”
Vance Lee: Yes. Well, kind of by… It was almost by force. It wasn’t something that I was originally thinking, “Okay, let’s move off Amazon.” We were sold the Amazon dream, so we were like, “Okay, let’s go into Amazon. This is the path to go about being successful on eCommerce.” But in Q3-Q4 of 2016, Amazon changed their TOS, so their terms of service. Before this, I don’t know if you’re familiar with kind of like the Amazon TOS, but before this time period in 2016, they had this period where it was okay to get essentially fake reviews. They called it honest, unbiased reviews. So, you could give away your product to somebody, and as long as they wrote… They can leave a review, and as long as they wrote, “This is an honest, unbiased review,” they can leave any review and it would stay on Amazon.
Kurt Elster: Look, the guy who sold it to me said it was good is what’s going on here. He said he’s not lying.
Vance Lee: Exactly. So, this was 2016, and Q3, Q4, around that time, they announced that they would no longer allow for honest, unbiased reviews. So, that was a big shocker for a lot of people that were using that as the only launch strategy at the time, and that’s what I was doing.
So, this was a huge issue because I had just invested a lot of money into developing a product, and it was in the process of being manufactured. So, this was… I was entering the coffee niche at the time. And-
Kurt Elster: What’s the product?
Vance Lee: The product was a cold brew coffeemaker that I called The Arctic. And so, this was getting manufactured. Lots of inventory was coming, so it was $30,000 - $50,000 of inventory, and it was just… It was coming. And we had no idea how we were gonna sell it. And so, we started looking at what are the other options. If Amazon isn’t gonna work the way that we want it to work, let’s see what other options there were.
So, we looked at Shopify, and then I looked at Kickstarter, and Kickstarter was something that I never thought about as an eCommerce platform because I just… I was a customer there and I just bought two or three things from Kickstarter. I thought it was a really cool concept. I looked at Kickstarter. I said, “Hey, this could actually be something that we could try to launch on.”
And so, we did a little bit of research and we said, “Hey, this isn’t that different than launching on Amazon. There are nuances that are different.” But we said, “Okay, we still need similar things.” We need our assets, we need the things to make this look presentable as a product, we need the copy. All that stuff is important. What else do we need that’s different? Well, we needed a video, so we said, “Okay, let’s figure this out.” Let’s try to launch this on Kickstarter. Because it was a very cool product. It was a very unique product. The design was very interesting.
And so, we said, “Okay, let’s try to launch this on Kickstarter.” And that’s what we did. So, instead of launching on Amazon, we had this inventory that was getting manufactured, and we said, “Let’s launch this on Kickstarter.” And we ended up doing really, really well. We ended up raising about $650,000 on Kickstarter, and we did another 200K-ish on Indiegogo when we moved over there, and we also did about $90,000, almost $100,000 in upsells. So, that was a $950,000 launch that came from a product that we originally wanted to launch on Amazon, but we figured out how we could do this on Kickstarter.
So, that’s pretty much to answer your question. It was kind of like an unintentional exploration of what else we could do outside of Amazon. It ended up being Kickstarter. And we thought, “Hey, we’re onto something here.” And I think a lot of people that are having challenges launching on Amazon, or building a brand, or building an audience, this could be a way to do it. That’s how we got introduced to Kickstarter.
Kurt Elster: For people who aren’t familiar, just give us the quick background. What is Kickstarter? What is crowdfunding?
Vance Lee: Great question. So, essentially crowdfunding is when you want to raise money for… So, crowdfunding wasn’t necessarily just for eCommerce. It was for many things where people can… The idea was we want to launch something. We want to launch a project. We need money for it. So, instead of getting it from one investor, a lot of people would kind of chip in to make this happen. So, it’s a crowd funding the project. So, in the context of eCommerce, Kickstarter was this platform for launching product ideas.
So, back then, a lot of actually pretty interesting products that we all know about nowadays were launched on Kickstarter. So, the Pebble watch, Oculus Rift, all these interesting products were actually originally product concepts.
Kurt Elster: When you think of first smart watch, people probably… It’s like, “Well, Apple Watch created that category.” No, it was that eInk watch, Pebble. I have one. But no, my first Kickstarter project that I backed was the Fidget Cube, and I still have it, and it was like the limited edition SNES colors, which like they were ahead of the curve on retro gaming being cool. And it’s still on my desk. Still have it. And I remember being so disappointed that when that product launched, before they were able to ship it, they were already selling knockoffs on AliExpress.
Vance Lee: Yes. That was a very famous situation. That was a very, very well known story for Fidget Cube. I remember that. But yeah, so the idea is people come together to support a product launch, and so if you have an idea, so originally it was for unique ideas, but now as it’s evolved over the past 10, 15 years, people are launching fairly regular products on Kickstarter now, but they’re using it kind of as a way to launch without inventory, and also to build an audience, and build some credibility before they go onto whatever channel of their choice that they want to scale on.
So, that’s kind of like the Kickstarter in a nutshell.
Kurt Elster: And then one thing I want to address here is we’re not discussing Shopify. It is not because this is unrelated to Shopify. It’s because when you are building a brand, or a new product, the hardest part is getting that initial set of orders, getting that initial customer base. Once you have that, life gets much easier. Once you’ve moved past that initial launch phase. Even if one person buys, 10 people, 100 people, then… Ah, now you’re getting somewhere.
And so, we often have to look at borrowing other people’s audiences. Getting in front of other people’s audiences. Well, marketplaces like eBay, Amazon, and Kickstarter, unique though it may be, it’s still a marketplace, and the advantage there is this is gonna make it easier to get in front of other people, new eyeballs, and qualified eyeballs, like fundamentally if they’re on that marketplace they’re at the very least interested in browsing. And so, okay, good, that can drive brand awareness.
And so, that’s why we’re… Kickstarter as a platform is so interesting because you don’t have to have that inventory. I don’t have to take the risk. I have to go through the product development, but I don’t have to be waiting on inventory. That’s the situation you were in. And that was great because you knew you had the inventory coming by the time the campaign started. But if you don’t, that’s in theory like you’re raising the money on Kickstarter to pay for manufacturing the final project.
Vance Lee: The initial inventory order. Exactly. Yeah. And a lot of people that are coming in are either new entrepreneurs, or even people that are existing entrepreneurs that want to launch new products. Putting out a bunch of cash can be kind of risky, so the idea here is how can we minimize the inventory risk, which is most of the stuff, because when it comes to launching a campaign, a lot of the assets that you’re creating, whether you launch on Shopify, or Amazon, or Kickstarter, you’ll need those assets. You’ll need copy. You’ll need photos. Kickstarter, nowadays you need a nice video, and I would argue that that’s gonna get you to be competitive on the other platforms anyways, but you’re not making stuff that you wouldn’t normally make.
So, you would be making those assets anyways, but you’re kind of putting yourself in a situation where you don’t have to put that 20, 30, $50,000 in inventory, so that mitigates the risk of launching. And so, whether you’re a new entrepreneur that’s launching a product, or if you’re an established entrepreneur, this also has many advantages to not only cashflow, but minimizing risk, and being able to actually be cashflow positive from launch.
Kurt Elster: And so, in your case, you were on Amazon, and you had a working strategy, you started simple with the silicone rings, which are… The big advantage is that they’re inexpensive, they don’t break, they’re easy to ship, and then you’re like, “All right.” But when you’re selling a product… How much were you selling those silicone rings for?
Vance Lee: $19.97 or something like that, so 20 bucks, essentially.
Kurt Elster: So, it’s tough to build huge, bigger revenue businesses with that lower AOV versus what were you… What was gonna be the retail on your cold brew coffeemaker?
Vance Lee: It was like $59-$69 range depending on the accessories.
Kurt Elster: Okay, so we’ve tripled our base price of our core product here. And the strategy at that time was get a bunch of questionable reviews and Amazon said, “All right, no. That loophole is closed. You’re done with that.” And so, you went to Kickstarter. What made you opt for Kickstarter over anything else?
Vance Lee: So, when we talk about this kind of approach, we call this crowdfunding, and within crowdfunding Kickstarter is the biggest platform. There’s another platform called Indiegogo. They do very similar things. But we opted for Kickstarter because we knew that they were the biggest at the time and at that point we were in a situation where we just wanted to really… The cash was a big deal for us. We were having really big challenges with launching products and not being able to get enough cash for the second order, so we put a lot of money into the first order, and we’d sell it out, and by the time we’d sell it out we’d need to pay for the second order.
And at that point, we were like, “Oh, crap.” With a lot of the Amazon strategies, with the ad spending, we’d dump a lot of money into it, and we didn’t get as much money as we needed back compared to how much we invested initially. So, this was a big challenge in terms of cash flow, and any eCom entrepreneur that you talk to has this type of challenge, whether you sell on Amazon or Shopify. Generally, cash flow challenges are very common. And the common misconception is that when you get more successful and you get bigger, the cash flow challenges go away. Well, that’s actually not true.
If you’re going bigger and you start scaling more and you need more inventory, the cash flow problems actually amplify. So, we were running into a lot of these issues.
Kurt Elster: Yeah. It starts compounding.
Vance Lee: Exactly. Yeah. So, we’re running into a lot of these issues, and so Kickstarter seemed like the perfect option because it’s… Well, we didn’t actually… In our situation, we actually already ordered the inventory. But what it did for us was when we sold that $950,000 at Kickstarter for this campaign, we still spent the $50,000 in cash for the inventory, but in this particular situation it was crazy because we had all of this extra cash. So, it kind of put us ahead in terms of cash flow. So, this is very uncommon for eCommerce.
But to be able to have that type of opportunity to get ahead in terms of cash flow, that’s gonna be a really cool situation, because now you can say, “Okay, well, I want to buy more inventory, or I want to invest in marketing.” Or maybe, “Hey, I’m building this brand. Let me launch another product.” There’s a lot of things that you can do when you’re in the driver’s seat with cash. And that was a really massive advantage with Kickstarter.
Kurt Elster: Really, you said, “All right, the right we’re gonna go is crowdfunding,” and it worked out very well. Between Kickstarter and Indiegogo, what the heck’s the difference? Indiegogo has always… This is totally unfair. It’s always seemed less legitimate to me. I’ve never bought anything from Indiegogo.
Vance Lee: Yeah. I think your perception is right because Indiegogo has always been open to accepting projects that were not working projects yet. So, they’ve been open to the idea of accepting concept projects. So, Kickstarter does not allow you to get approved unless you show a physical working prototype, so for a lot of categories, that’s irrelevant. If it’s like a towel, or a knife, you’re okay, but for things like electronic products that were kind of like interesting, that they were claiming to do something interesting for maybe training your brain, or health detection, or something like that, you wouldn’t be able to launch that on Kickstarter unless you actually had a physical working prototype.
Indiegogo, I’m not sure if it’s changed recently, because I’ve seen… They’ve had a lot more legit projects recently. But Indiegogo for the longest time has allowed for concept products to launch. So, that’s kind of a lot of people’s loophole into crowdfunding was to launch on Indiegogo. But in general, between the two platforms, very similar idea. Very similar structures. But Kickstarter has a way bigger audience, at least at this current time, and Indiegogo, quite a bit smaller.
But when it comes to the way that they operate, Indiegogo allows for something called partial funding, so if you don’t… Let’s say you wanted to raise $50,000 and you hit $30,000. They will still allow you to take the $30,000. Kickstarter does not allow for that, so if you hit $30,000 when your goal is $50,000, you wouldn’t get any of it. So, Kickstarter operates on this principle called all or nothing funding, so that’s the difference. That’s the main difference in terms of how they operate.
Kurt Elster: Oh, I didn’t know that Indiegogo would do the partial funding.
Vance Lee: They do allow that. Yeah.
Kurt Elster: So, given your experience, who is an ideal… What kind of merchant, product, brand is an ideal candidate, and who should absolutely not bother?
Vance Lee: So, this is a question I’m asked a lot, and if we take a look at it from the perspective of whether or not you’re a new entrepreneur, an existing entrepreneur, if we look at it from that perspective, whether you’re new or existing, or you launched 12 products or 20 products, Kickstarter is gonna be effective for both situations. So, if you’re new and you’re having an issue with cash flow, and you don’t want to overinvest, and you don’t want to over leverage in terms of risk, it’s an awesome idea for you. Because the idea here is you’re minimizing your risk and you’re able to still kind of put your product idea out there to launch, and get feedback, and validation, and funding.
Same thing with the person that’s bigger. If you’re launching a product and you already have a lot of products under your belt, this is still gonna give you the same advantages, and of course, cash flow benefits everyone, and minimizing risk benefits everyone. So, that’s… Regardless if you’re new or big, this is still gonna be something that can benefit you. All you’re looking to do is essentially launch a product with a bit of a better launch strategy. So, from that perspective, whether you’re new or you’re an existing business, works pretty well.
When it comes to product ideas, what I like to say is that you want to aim for something that’s going to be at least a little bit unique, whether it’s the product itself or the positioning itself. We’ve seen lots of different weird categories do well. Anything from food, we have an example of someone we worked with, they were called Fly By Jing. That was the brand. It was a hot sauce. These guys launched… I mean, hot sauce, like a Sichuan Chinese hot sauce. I mean, this is the kind of stuff you see at the grocery store at the bottom shelf for like $3 or $2, something like that, but these guys launched on Kickstarter. They raised $120,000 and they used this as a way to kind of scale into Walmart, Target, Whole Foods, Amazon. They have their own website that has 150,000… Well, they used Shopify. 150,000 visitors a month. It’s a crazy thing. But it all happened from building their initial audience from the Kickstarter launch.
But yes, anything from food, all the way to technology, all the way to kitchen products, all the way to pet products. We’ve seen lots of products be very successful. But the thing that they have in common is that they have a unique angle that they’re presenting the product or they’re presenting the product in a unique way that hasn’t been seen for a new audience.
So, some element of uniqueness is really gonna make you stand out in this type of environment where people are actually looking for something that they’re compelled to be like, “Hey, this is really interesting. Let me find out a little bit more about it.”
Kurt Elster: I think it’s the novelty, right? When I go to Kickstarter, it is because I’m like, “I want to burn 50, 60 bucks on something novel and interesting that may or may not happen.” I enjoy the moonshot gambling aspect of it. And then I, from experience, I know whatever timeline they give me, just tack like 12 months onto that. You’re never getting your thing in the time that everybody thinks. They’re overly optimistic. You know, I bought a keyboard that took over a year. The Fidget Cube, of course, was like mired in issues and arrived.
But you know, you get your stuff. There’s just a delay. And on the projects where I didn’t get my stuff, I did eventually get a refund. That’s pretty good. But you mentioned it’s a no-risk situation. Is it really no risk? How can I screw this up and how can I do it right?
Vance Lee: I mean, it’s no inventory risk, so that’s the biggest chunk of a lot of risk for people. I mean, if you’re going through a launch and you’re going to the process of creating assets, you’ll still need to invest in all the things that you would if you were to launch on Shopify or Amazon. You need to make this launch look legit, right? So, you’re gonna be investing in the creative assets, like photo, video, copy. All the stuff that makes this product presentable. So, there is risk, but this is not going to be different than the risk that you would have to launch this product on another platform, except you’re not paying for the inventory.
And then, of course, there’s lots of ways that you can definitely screw it up, and we’ve seen almost all of them, but I think one of the biggest ways that people screw up when it comes to launches is that they don’t prepare in advance. They think that they can launch the campaign and just somehow it’s going to be successful, and people are going to find it, and they love it. This might have been possible when Kickstarter first launched, and it was a really cool idea, and there weren’t a lot of products, but nowadays it’s actually really challenging.
So, we put a lot of emphasis on the prelaunch phase, which is essentially all of the work that you do leading up to the second that you go live on Kickstarter, so that part of it is super important, and during that part we do a lot of different things which we can go into, but one of the most important things is to build your community and your build your audience that’s gonna support you. And too many projects go live without that at all, or without really having fully developed a community that’s gonna want to support them when it comes to the launch. And so, that’s, I think, one of the most common ways that people mess up a launch.
And if you’re gonna invest money, and time, and effort into building a launch, that’s definitely one of the parts that you want to nail, because at the end of the day when you build an audience and a community that supports your launch, these people are… You hinted at this earlier when you talked about we’re talking about not exactly Shopify, but this applies, of course, to building a brand on Shopify. Because at the end of the day, if somebody supports you on your project when you launch it on Kickstarter, then these people are likely to support you in the future. So, these are gonna be likely your fans for your brand as you move your product to Shopify, as you launch accessories, or you launch new products on Shopify. They’re gonna be the people that come to support you because they followed your process, your journey into launching this product, and they feel like they’re connected to your brand.
So, this is a really cool way to build kind of this brand loyalty in a way that is not really that possible with just kind of like a transactionary thing, whether it’s on Amazon, or somebody just saw the product and they bought it. It’s a really interesting way to develop a strong relationship with your audience. And so, this is one of the benefits of being able to use this launch process as a way to build that audience and build that community.
Kurt Elster: I accept the importance of community building. And I think inherent to that is like you’re trying to… you’re getting people emotionally invested while also validating the product and idea, and hopefully going through some kind of iterative feedback loop there where you’re working in public building a community. They’re getting invested and they’re helping you revise and improve that product. Conceptually, I get that. Trying to get started with it from zero seems very difficult. So, talk me through that all important prelaunch phase. Before I’ve even picked a platform, decided what to do, I’m in product development, audience building, community building. What’s that look like?
Vance Lee: Yeah. Great question. And so, a lot of people don’t do this, and a lot of people that launch on crowdfunding, they might go kind of like the easy route of just running ads to a landing page, and getting people to opt into email, so that’s definitely something that should be done, but that… If you only do that, you don’t get the benefit of being able to kind of work with your audience and build that deeper connection.
So, what we like to do is as early as… People come into this at different phases. Some people come with just a product concept idea or some sketches. On the other end of the spectrum, we have people coming with full out already developed products that are ready to manufacture. So, depending on where you are, you’re gonna have a bit of a different take on how much you can actually incorporate the community in giving you feedback. But what we like to do is as early as possible, so regardless, let’s say you’ve developed your product, and you have the first prototype. If that’s where you are coming into this, that’s the stage where you want to be building your audience and connecting with them to try to get feedback.
So, what we like to do is we like to start with building the audience, and the earliest phase that we focus on is we focus on what we call customer development or community feedback, which is essentially pitching the idea to them and saying, “Hey, we have this idea.” And let’s say we’re at the stage of the product is kind of ready, or we have a prototype, it’s like, “Hey, here are the features. Here are the benefits. Here’s what it looks like. Here’s what we’ve really wanted to put into this product. What do you think?” And there’s a structure to asking this, but really the idea is we want to get two pieces of information from them.
So, when it comes to the product, there’s two main categories of information we can get back, so one, number one, is the actual feedback on the product itself, so the physical product itself. And number two is product positioning, so how to present the product so it’s going to be successful. If you’re in the early stages of your product development where it’s concept, or you’re just kind of like working out early kind of sample making phases, you can actually take the feedback about the product and say, “Hey, I have five ideas for features, but of course it’s gonna cost me a little bit of extra money to either develop it, or to incorporate these features into it. Let’s start asking our community what features they think are most relevant.” And maybe everybody’s like, “Hey, number one and two, those are the best ones. Three, four, five, not so important.”
And if that’s the case and you get that feedback, you can actually incorporate that feedback now because you’re not that far along in your product development to be able to kind of exclude feature three, four, five. And what you’ve done is you’ve saved some money, you’ve actually created a product that the people want, and you may be able to lower the price point because you’re not incorporating all these kind of other things into it that people actually don’t want.
So, that’s product feedback. Number two is product positioning, so let’s say… I mean, this is relevant for both whether your product is in the early stages or later stages. But if your product is at the stage where it can’t really change at all because you’re very, very far along, then product positioning is really valuable, because product positioning is how you’re gonna actually market and sell the product. So, we want to incorporate people’s feedback into this by saying, “Okay, well, we have these benefits. What benefits are most interesting to you? Which taglines are most interesting to you?”
If you’re at this phase of choosing colors, or packaging, or that type of thing, what’s most appealing to you when you look at these photos? And this allows you to take this feedback and incorporate this into building the actual campaign page. So, when you’re actually launching, you’re gonna make assets like photos, videos, you’re gonna write copy, so if you’re gonna be interacting with the audience to get feedback, this is going to save you potentially lots of money that you’re gonna be dumping into ads to make sure that the ads that you’re making are going to be the best one.
This is gonna save you a lot of money when it comes to making sure that you create the page and shoot the right assets like in terms of photo and video in the right way that’s gonna be most appealing to the audience so that it’s gonna convert the best. So, these are the two things that we generally try to get our communities involved in because it has a direct impact on the product itself and the way that we choose to market the product, and so this is going to allow us to make sure that number one, people want what we’re selling, and number two, they’re going to respond positively to the way that we’re selling it. And so, this is valuable for any type of launch, but when it comes to crowdfunding this is extremely valuable because before we decide we want to start making all these assets, investing in video, dumping money into ads, this is that step that most people miss. And to be able to actually incorporate this feedback from the community.
So, this is a key element of this phase of prelaunch.
Kurt Elster: So, this is really… This is simultaneously research and development, audience or customer journey exploration, and our product development, and all part of this prelaunch strategy. And what I was immediately… my mind ran to is like, “Okay, I develop this product with them. All this community info is happening online, and I can survey these people, I can ask them questions. I can figure out what they like about it, what’s important, and the language they use.” If I can get all that, now I need to be able to communicate that to people who are seeing my product for the first time when it goes live on Kickstarter. And so, I can get a copywriting formula form a site like Copyhackers, and I’ve got all my info. I can put all this into ChatGPT and be like, “Hey, figure this out, why people are buying, what they like about it, what kind of person they think it’s for, et cetera,” and then have it apply all that to a copywriting formula for a sales letter, and at the very least I can get a really good first draft out of this that is based on actual customer feedback and written in the customer’s voice. Because how I talk about it is never going to be how my customers talk about it.
And that’s like that research, that real data is the thing you can’t fake with ChatGPT. You cannot fake genuine primary sources of data with AI. I mean, you can, but it’s made up. It’s not gonna help you that much.
Vance Lee: Exactly. Yeah.
Kurt Elster: So, I’m like… When I have that, now I’m so much more confident in my launch, because I have real people telling me… I mean, they’re not going to lie to you. They’re gonna be… If something doesn’t work or it’s a stupid idea, strangers on the internet will absolutely be willing to tell you that. And so, if you can get this community behind you, that really should up your confidence level here.
Vance Lee: Exactly. And we want to do this way before we create the actual campaign page or landing pages. A lot of people will just skip to landing pages because they want to say, “Hey, let’s just start running ads. Let’s get people opting in.” And this could work. It’s possible. But it’s unlikely to be as effective when your landing page isn’t even communicating… I mean, first of all, we’re not sure if people want your product in the way that you’ve created it, but secondly, if you’re creating a landing page to communicate what your product is about, how do you know that’s people want? How many people have you talked to? In a lot of situations, entrepreneurs are kind of working in their basement, and they’re just like, “Hey, this is a great idea.” And they’re kind of in their own echo chamber. And maybe they’ll ask a friend or a family member, and family members are usually very supportive, and it’s like, “Yeah, that’s awesome!”
And that’s not the feedback that we need.
Kurt Elster: Yeah. Your mom is never gonna tell you it’s a terrible idea. Eh, she might.
Vance Lee: Exactly. And that’s not the feedback that we need. So, at the early stages we want to catch this as soon as possible because we might be… If you’re early stages in product development, you might be dumping tens of thousands of dollars into a mold or something like this. Of course, you don’t want to do that without being clear that your concept is going to be what people want. We had a member of our program, they were kind of in the collectibles category, so they wanted to do something with Funko Pops, and it was kind of a cool concept where the founder really loved this. It was about putting additional… It’s like dressing up your Funko Pops. You’re familiar with Funko Pops? It’s like these-
Kurt Elster: Oh, absolutely. Yeah. I mean, who does not have a few Funko Pops somewhere in their house?
Vance Lee: So, yeah, he had this awesome idea of… Well, he thought it was awesome. He essentially wanted to put these kind of like stickers on the Funko Pops so you can kind of like dress up your Funko Pop, and he patented it too. He was so excited. He patented this idea. He started building his community and the community… He built it out of influencers. He had regular people in the collectibles world. He had influencers that were posting Funko Pops stuff all the time, like YouTube creators. He built a massive community and he started asking them like, “Hey, what do you think about this idea?”
And the feedback that he got wasn’t very positive. And so-
Kurt Elster: Oh, no.
Vance Lee: So, this was not positive and also positive at the same time. Because he got the feedback that wasn’t what he wanted to hear, but at the same time, he got the feedback that was helpful for him. So, he ended up deciding to slash the project. It hurt. It was his baby. He had this awesome idea. He really wanted to follow through with it. But he kind of cut the project out and he focused on what else can I launch, and then because he already had this community, the community was like, “Hey, this is what we want.” And he ended up getting some suggestions for awesome ideas. He had a few other concepts and he ended up settling with a concept, which was these top loader binders for collecting sports cards, Pokémon cards, that type of thing. Launched it, 200K on his launch. Awesome campaign and he had a lot of support from this community who was kind of following his journey the entire time. It was a great campaign.
And he kind of incorporated his community in this entire process. And how awesome is it to be a part of this community where the founder of this company was kind of connecting with you, getting your feedback, and following through these interesting ideas, and then to end up supporting a project that you really saw how it evolved over time? And so, this is a really good example of feedback that saved him tens of thousands of dollars and months of time because he could have just gone through with this, and it wouldn’t have gone the way that he wanted to go, and he got this feedback way earlier than he wanted, or way earlier than the launch, of course.
Kurt Elster: We keep talking about people who built communities. When you talk about that, what channel is it? Where do these communities live? What app, service, network?
Vance Lee: The community can live in many different ways, and I think it depends on your audience and the type of audience you have. Now there’s lots of different tools, but at the very minimum it’s going to be for us an email community, and the reason… The difference between an email list and an email community, and I don’t like to use the word list, because list implies that there’s just people that are kind of passive on a server, that it’s just their data is there. But we like to use the word community because community is really in the way that we choose to engage with them. So, if somebody is participating, somebody feels like they have an opportunity to contribute, they feel like they have an opportunity to give something to this project and to the brand, then that’s when we call it a community. So, it can live on your email list. A lot of these, for example, with the project that I just mentioned before, his lived on Facebook, and so it was a Facebook group.
So, nowadays you can build communities on Instagram, as well, so there’s a lot of different ways that you can kind of have this live, but the core element of what makes community is that people feel engaged, and they feel like they can participate and contribute to what’s happening with your product and your brand. So, if you can create that, you can even create a live community. You can even have people meeting every month to kind of see your updates if they’re in the city of the product that you’re developing.
So, it doesn’t really matter, but the idea here is that the intention and the feeling is that they’re participating, and they feel like they’re a part of what’s happening with your product and your brand.
Kurt Elster: Okay. I get it. So, if anything, I was overthinking it. If you’re starting at zero and you have to do this before building landing pages, and sending traffic to it, where the heck do you get the list? How do you build the audience? I know that question’s like, “How long is a piece of string?” But how would you do it?
Vance Lee: Yeah. Great question. There’s lots of ways to do this and the way that we like to do this, at least when we’re starting off, is with the free ways. There’s lots of paid ways to do it, but let’s start with the free ways. So, the free ways to connect with existing communities where your target audience spends time. So, that could be for example a Facebook community, that could be a Reddit community, that could be even a live community, so if you’re launching let’s say… I don’t know, like a tennis product, or like a running product, you could even connect with the local community in your… whatever meetup in your city. And so, the idea is to start connecting with people that are in your target audience, because this is what’s going to allow you to find those people initially. And so, when you start building momentum, you’re gonna be able to get referrals from people, but we really want to start off with asking the question, “Where does my target audience hang out?”
And if we ask that question, we’re gonna start coming up with creative ideas where we can find these people and start engaging with people at the place where they hang out, and you know, there’s a process that we go through this where we start engaging them, we start asking questions, and eventually it can lead to surveys, or it can lead to even phone conversations, it can lead to sending them samples of the product and the prototype. However, you choose to do that, those are kind of all optional, but the idea here is you want to engage with people to start having conversations about the product, and so the question I usually ask is where does your audience hang out? And that’s gonna differ depending on your target audience or your niche and kind of the demographics, what that looks like.
Kurt Elster: What are their watering holes? That’s what Amy Hoy would say. She calls this customer safari. You need to go on a safari to find your customers, locate their watering holes, and then like a nature photographer, sneak up in there and start talking to people, start observing them, start figuring it out. And you’re right, it’s such a difficult question because that’s going to be totally different depending on who it is.
Maybe that’s Reddit. Maybe that’s a Facebook group. Maybe it’s local meetups. Maybe there’s a Slack community you can join, right? There’s lots of places. But once you immerse yourself in it, then you’re gonna start finding it. And if you don’t know it, you know that is a great litmus test for am I ready, do I know enough here to go forward? And if you don’t know those watering holes, okay, no, you’ve not gotten deep enough in it. Would you agree with that?
Vance Lee: I think so. Yeah. I mean, at the minimum you should understand your target audience, so if you understand them enough to understand where they hang out, I think that’s the bare minimum to at least start this process of saying, “Hey, let me learn more about these people.” Maybe we have somebody working on a smart ring right now, kind of a ring that you can use to control your music, and to do a bunch of interesting things, and they started looking at productivity groups because that was their target audience. They wanted to target people that were interested… It was a really unobvious one, because they were saying, “Okay. Well, where can I find this audience? I can’t go into the groups of existing smart rings.” Well, he did that also, just to kind of do some preliminary research, but it’s like it’s so unobvious about where I can find my target audience.
Well, the question was what do you want your product to connect with when it comes to your audience? Is it around health? Is it around productivity? And she narrowed it down to kind of productivity, and effectiveness, and kind of like again this category of athletes, like cyclists, as well, because you can use this while you’re on a bike. So, the idea was how can you think creatively about where your audience hangs out? And that’s going to be your first entry point into at least kind of seeing how this community operates, and what kind of things they talk about, or what things they’re interested in, or what kind of language they use, and that’s gonna be a really cool way to step into that.
Kurt Elster: You’ve broken crowdfunding records twice. For those campaigns, how long, how important was that community building prelaunch phase?
Vance Lee: Yeah, so with my first campaign, that was… There was a lot of luck involved in that, so there was barely any community involvement involved. A month of ads, and that was kind of the… That was kind of like my entry into crowdfunding. The great thing about when you launch a successful campaign is that those people are automatically your community.
So, my next product I launched, I already had a bit of a community from the first campaign. So, actually the idea and the concept with my second launch, which was called AVENSI, they were these glasses that enhance the smell and taste of coffee. So, it sounds kind of weird. It sounds kind of like… But it’s actually built off the principles behind wine and whiskey glasses. So, launched this, and what was really cool about that was this idea came from the community in a way. They suggested, “Hey, we’re looking for cups. What kind of cool ideas can you make for coffee cups?” And this is kind of how this evolved.
And so, this community that we had from our first campaign actually helped us build essentially our second product when it came to launching on crowdfunding. And when we actually launched, we had about… That campaign raised about $220,000 on Kickstarter. Maybe another 90 on Indiegogo afterwards. But what happened was in the first launch on Kickstarter, we had about $40,000 worth of income revenue that came from previous backers. We tracked this to our previous customers that were from our first campaign.
So, right from launch, right away we already had $40,000 of sales that came from existing people, so that cost absolutely nothing, so that was really cool. This is a situation once you start building your audience, you can start kind of like compound interest marketing on the people that you’ve already accumulated. And if you do this again, you’re gonna have more audience, et cetera.
So, that-
Kurt Elster: Oh, compound interest marketing. That’s a magic, magic phrase to my ears.
Vance Lee: Exactly. Yeah.
Kurt Elster: All right, so we’re going a little long here, and I have at least seven more questions I could ask, but I want to know. You are a wealth of knowledge. Believe you have a course for this where you’ve put a lot of this info together, right? Tell me about it.
Vance Lee: So, our course is called The Launch Accelerator Blueprint, and this was pretty much put together from our knowledge of launching our own products, and helping a lot of our agency clients launch their products, as well, so this is kind of taking the system that we call the Launch Accelerator Blueprint and putting it into a program that allows you to take a look at this and to launch your own products. And so, it takes you from the beginning process of ideation and concept, all the way to what happens at the launch and after the launch. Because, of course, the launch is only the beginning, so we’re on a Shopify podcast here, so the idea here is Kickstarter is not the be all, end all. Once we have a successful campaign, we have to want to be able to take that and scale that into the real world, so that’s where Shopify comes along, that’s where Amazon comes along, so this takes you from the beginning phases of ideation all the way to launch and then post-launch, and that’s what the course is all about.
Kurt Elster: And we’ve had, especially 10 years ago, earlier in our career, a lot of brands that we started new Shopify stores for were existing brands that had had successful Kickstarter campaigns, or successful Amazon stores, and then after you get to a point where you go, “Okay, I want to own more of this process. I want to have a more branded, controlled experience.” And that’s where you have to start building your own playground with your own domain name, ideally on a Shopify store, and I want to know. What would your advice be? You’ve got so much experience, but if I’m an existing Shopify merchant, I’ve got a product idea rattling around in my head, crowdfunding sounds real attractive. What’s your advice?
Vance Lee: I mean, if you have an existing store and you have an existing audience that you’re already selling to, this is an amazing situation to be in, because if you’re not already, and I would say that 99% of store owners are not doing this, they’re not engaging with their audience. They might send sales newsletters once a month, or they might send this very normal campaign-based stuff, but they’re not connecting with their target audience. They’re not connecting with them and saying, “Hey, we have this product idea,” or, “We have these three product ideas, which one would you like to see?” So, my first recommendation would be to actually kind of start seeing how you can look at your audience as a community, and use that as a way to kind of solidify your idea, or to refine it, and if it’s interesting to you and you think that the advantages of crowdfunding, for example, to be able to have the cash flow, and to be able to build a larger audience through Kickstarter’s audience, and all those types of things that we’ve discussed today, if that’s interesting to you then you can kind of take a look and say, “Hey, what would it take to actually take some steps into launching on crowdfunding or Kickstarter?”
And I actually have a few resources that you can check out on my site to help get you started with that and they’re all free.
Kurt Elster: And remind me what that site is again?
Vance Lee: Live My Playground dot com and we can also post a link if that works easier for everyone, so Live My Playground, so L-I-V-E, my M-Y, Playground-
Kurt Elster: And I’ll include that in the show notes, so tap or swipe up on the show art and you’ll get to the show notes. Here’s my plug. I’ve got this app, it’s called Crowdfunder, and it gives you a Kickstarter-style widget that you can put on a product page, and so you start your inventory at zero, because it’s a preorder, and as inventory ticks down, those appear as part of a progress bar, and you set your goal, whether that’s units sold or dollar value, and your end date. Can I apply… Let’s say I’m not necessarily a candidate for Kickstarter, I’ve already got the successful store, can I apply these same strategies on my own store with an app like mine or anywhere else that gives me this style crowdfunding experience?
Vance Lee: Totally. I mean, I think the idea here is just how can you build up your audience and how can you get them excited for your launch? In the process of building up your audience, it’s how can we validate the product idea? How can we make sure it’s being presented in a way that they want to buy it? So, all these principles still apply to any type of product launch, so definitely you could use it if you have this plug-in that allows you to do this on your store. And if that makes more sense for you, awesome. If you think you can make use of Kickstarter in terms of being able to grow your audience and access a new audience, then you’re not necessarily connecting with your existing customers and your list, then this is where Kickstarter would have a bit of an advantage to kind of grow your audience base.
But if you’re saying, “Hey, I just want to keep it to my own audience and I want to sell it to them,” we can definitely apply a lot of the things that we talked about today to engage your audience and to use this as a process to launching your own store.
Kurt Elster: Excellent. And any chance you’re active on social media or have your own communities that we could join?
Vance Lee: Live My Playground dot com, you can find the links there.
Kurt Elster: Very good. I’ll put that in the show notes. Vance, thank you so much.
Vance Lee: Thank you so much for having me. This was awesome.