Avalara > Blog > Business > How One Ecommerce Seller Used Kickstarter to Launch His Business

How One Ecommerce Seller Used Kickstarter to Launch His Business

  • Aug 5, 2015 | Suzanne Kearns

When entrepreneur Erik Moon, Founder of Decadent Minimalist went to the doctor for unexplained back pain, he never imagined it would lead him to a new business venture. But his doctor's advice sparked a great idea.

"The first question the doctor asked me was if I carry my wallet in my back pocket," he says. "I didn’t believe that could be the source of my pain, but decided to indulge the doctor and carry it in my front pocket. The pain was gone within a few weeks."

Coincidentally, Moon had recently decided to leave the IT field and work toward a business degree, along with taking couple of engineering classes for fun. His discovery at the doctor’s office gave him an idea, leading him to prototype his slim aluminum wallet design as a class project.

Moon decided to introduce his design on Kickstarter to determine if there would be interest in it. What happened next is the stuff most entrepreneur’s dreams are made of. Here’s how he used the crowdfunding site to launch his now-successful business.

What steps did you take before launching your Kickstarter campaign? 

I did a lot of research into other Kickstarter campaigns, both good and bad, to determine what they did right, and what pitfalls I needed to avoid. For example, I learned you should set rewards at multiple prices so you will appeal to all types of backers, that it's necessary to keep your backers informed and educate them along the way, and that you should include multimedia in your updates.

On the other hand, if you run into problems or have delays fulfilling your campaign, don't stop communicating with your backers or make excuses, but be honest. Also don't over-promise, but instead set expectations low and over-deliver. And finally, be wise about how you set your goal. If it's too high and you don't reach it, you won't get anything, and if it's too low, you may not have the funds to complete it. 

How long did it take you to prepare your Kickstarter campaign?

Much longer than I expected. I spent the last quarter of school iterating and refining my design. By graduation, I had solved most of the design issues and began looking for a contract manufacturer. It took all summer to make a few prototypes and iterate a bit more. It also took some time for patent applications and submission. I finally launched the campaign in October of last year.

Was the response immediate, and how successful was it?

The response to the Kickstarter campaign was immediate, but it didn't happen by itself. I sent out emails, Facebook posts, Tweets--you name it--to get all my friends, classmates, former co-workers, family, and even remote acquaintances to help spread word about my project. Recent classmates were particularly supportive and helpful. I also started a PR campaign, which was minimally successful. But several good blog articles and a couple of tech media hits on BoingBoing, GeekBeat, and NoAgenda Podcast were very helpful.

I deliberately set the minimal funding goal low, at $5,000, and I hit it in just over a day. I learned there are many backers who prefer to pledge on day one and won't even look at projects that are already past their minimums. But the vast majority are the opposite--they wait in the periphery and may even follow a project closely, but won't pledge until the minimums are hit and there is more certainty.

In the end, I wound up with nearly 1,400 backers and over $90 thousand in pledges.

What was your next step?

As soon as I realized it was going to be a hit, I began to deal with infrastructure. I incorporated and opened a business bank account to separate business and personal finances, stocked up on inventory, and investigated things like packaging, materials, instructions, packing, labeling, and shipping. I also added an accessory, which is a money clip that snaps into the card wallet so it can hold cash.

After started with Etsy and Amazon stores. How did you get the word out about them?

I used Facebook, Google, and Bing ads, social networking, and in-person events, like the 2 Maker Faire. I found that for my product, the Facebook ads and word-of-mouth from customers are the most effective.

When did you decide to launch your own website? Has it been successful?

I launched it about a month ago. It took about two weeks to get everything up and running, so we're just starting to see sales now. I currently receive about 50 percent of my sales from Amazon, 25 percent from Etsy, and 25 percent from the website. Amazon and the website sales are visibly growing.

I use Shopify for my website because they make it so easy. And the cost of sales are considerably lower than the Amazon and Etsy marketplace models.

When did you become profitable?

I was profitable after the Kickstarter campaign, but I haven’t paid myself yet because I’m reinvesting all profits into R&D for new models, and to purchase inventory. I expect to be able to pay myself a modest salary by the end of the year. It was really important to me that we be cash-flow positive immediately after the Kickstarter campaign--otherwise there was little point in continuing the business.

Since the first Kickstarter campaign, I have taken a modest investment from myself and a longtime friend to help fund the acquisition of more inventory. After this next Kickstarter campaign is funded, I should be able to repay those loans and fund the business going forward on cash flow.

Where do you see your business in five years?

Within five years--hopefully sooner--I would like to be selling my entry-level products to promotional-products companies and specialty retailers like mall kiosks. I would also like to have the higher-end products (such as the DM1 Titanium model currently being launched on Kickstarter) to be available in premium retail and custom engraving specialty retailers like Things Remembered.

What is your biggest piece of advice for someone thinking about launching an ecommerce business with a KickStarter campaign?

Using Kickstarter as a proof-of-concept for your business is a great low-risk way to test the markets. But potential entrepreneurs should not think of Kickstarter as a place to simply throw ideas against the wall and see what sticks. Campaigns are successful and become viral not because they are fantastic ideas alone. A successful campaign should have appropriately de-risked the project through multiple iterations of prototypes and proofs-of-concept.

In other words, Kickstarters need to build well-planned marketing campaigns, social media campaigns--and perhaps most importantly--a fantastic campaign video. The video does not have to be professionally produced, but it shouldn’t be something thrown together from a couple minutes of cell-phone footage.

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Avalara Author
Suzanne Kearns
Avalara Author Suzanne Kearns