Kickstarter can be a great way to validate an idea before you build it into a business. If the original idea doesn't gain any traction on Kickstarter, then at least you have the feedback you need to fine-tune it.
Jenn & Brett Epstein are the creators of Sideclick: a universal remote attachment for your streaming device.
In this episode of Shopify Masters, they'll share how they relaunched their business with an improved product after their Kickstarter campaign initially failed.
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"When we first launched the second campaign, I think we made $60,000 in a day and a half. The people who were there the first time, who were excited, immediately jumped back in.”
Tune in to learn
- What happens when you don’t reach your Kickstarter funding goal
- How to relaunch a Kickstarter campaign after an unsuccessful campaign
- The difference between working with reviewers vs. bloggers
Felix: Today I’m joined by Jenn and Brett Epstein from Sideclick. Streamline your streaming experience with Sideclick, a universal remote attachment for your streaming device. It was started in 2015 and based out of Jupiter, Florida. Welcome, Jenn and Brett.
Jenn: Thanks, Felix. We’re really excited to be on with you today.
Brett: Yeah, thanks for having us.
Felix: For sure. Okay, so tell us a bit more about this product, this Sideclick remote that you guys sell.
Jenn: Sure. Well, our sort of idea for this product started very organically because we as a family were looking to save some costs, and one of the ways that we did that was by becoming what we know now as a term called “cord cutting,” so we cut ties with our cable company and we started off with our cord cutting journey and we got ourselves a Roku. I wasn’t familiar at all with streaming devices, and I don’t think Brett had much familiarity with it, but he did some research and got us a Roku and we were sort of off on our streaming way and he came up with this idea just from our own us of our own Roku.
We found that we really loved it and it had this handy dandy little slick remote, but we were always having to search for the other remote to turn on and off the TV or to search for another remote to control the volume, and I think Brett had an idea that if he had a slim remote that could literally click to the side and attach, somehow, to the remote, it would be a solution that he himself wanted. At first, I was kind of like, “I don’t know. Sure, honey. It’s a good idea,” and then the more I started using the Roku and found that I would turn it on and the volume would be blasting and I’d have to find the other remote or our girls would be having problems juggling the multiple remotes, I kind of got onboard. I was like, “You know, I think this actually is a really good idea.”
Brett: Yeah, for those of you who aren’t familiar with the streaming remotes, almost all of them, like the big players, Fire, Amazon Fire TV, Roku, Apple TV, they all have really small remotes to control the streaming devices, but they’re usually WiFi or Bluetooth and none of them control the basic TV function, so you can’t turn on the TV, you can’t control the volume, the input. A lot of cord cutters use an antenna to get their local HD channels. We only had a couple channels, so you just needed channel up and down, so it was really just a lack of those basic buttons and I found myself having to surf with two remotes, one in each hand.
Felix: Yeah, this is really a great idea because I don’t have too much experience with a lot of these devices, but the ones that I have used, you’re right. It’s funny that they make it so difficult to turn on and off the TV, which is like the very first step you have to take before you can use the actual device. When you were coming up with this idea, do either of you have experience in developing products like this? Because this looks like a very slick product.
Brett: Yeah. I have a mechanical engineering background, so my day job, actually now, I work on designing jet engines, but I used to do some product development, like consumer product development. I wasn’t really into it, and for the most part, most of my jobs ended with us delivering a prototype to a customer, but I’ve always been an aspiring inventor and kept a journal. My journal, I never really did much with. I think Kickstarter kind of changed that because it made that process more accessible to inventors who maybe don’t have the funding to start a product from scratch, but this one wasn’t in my journal. This was basically one that I came up with the idea. Like Jenn said, she kind of got it, but I have a 3D printer, a really basic small 3D printer, and I printed just a shell of what I thought would work, and it had no buttons, no anything. I just clipped it on and showed it to Jenn and she was like, “Yeah.” She’s like, “I get it. This could work.”
Jenn: I have sort of more of a generalized business background and have spent some time in business, the administration side of business, a little bit of marketing, and I think what really got me excited about it was the fact that I did some research on the demands and sales of the streaming devices themselves, and they were just exploding, like millions and millions of units were being sold for Roku and Apple TV and Amazon Fire TV, so the fact that we were a complementary product for something that was just exploding in the marketplace was really exciting to me because I felt like you’re already so ahead of the game.
Marketing is such a challenge to introduce a product to someone, but it’s kind of like basic economics. When it’s a complementary product to something that’s already launching into space, it was very exciting to me because I felt like it was a product that was a solution, which is the best kind, but it’s also attached to something that’s already just has so much momentum in the market, so that was kind of exciting for me.
Felix: Yeah, this is a very important topic that I hear a lot from entrepreneurs that are successful, which is about timing, about catching that wave, like you’re talking about, and riding it as it’s rising. You want to be able be a part of something that’s already becoming popular. You don’t want to be the ones that are creating the market. You want to be part of markets already growing. When you were doing this kind of research to understand or to … and then realized that there was a growing demand in this industry, did you use any particular tools or services or websites that were helpful in determining all of this?
Jenn: Yeah, a lot of it is just kind of googling demand and googling terms like, “What are the sales statistics of the streaming devices?” You can find a lot of specific niche reports from professional marketing companies. I think one is called Parks, and they have an entire study that just shows how the streaming market is selling and they rank the streaming devices sales and they show you a trajectory of which devices are going to be taking over market share, so there is so much just free information out there, and it’s from very credible marketing firms, and they kind of give you a taste of the report which gives you, in our case, pretty much all the information we needed, and then if you need the details and the nitty gritty of the report, you can pay for them. In some instances they’re very expensive, but we found that we were able to get pretty much all the information that we needed just from basic Google searches on how products were selling.
In some cases, companies, it’s just public knowledge and public records that they’re letting you know how much they’re selling, like Amazon, for instance, is a little more secretive as to how many devices they were selling. But Brett and I, another way that we would research it, which was kind of exciting, is that we would walk into Best Buy, for instance, and we would look at the streaming shelves, and there were literally barrels of streaming devices. Not only were they on the shelves, but literally there could be barrels of them with hundreds of devices in them. And we would talk to the sales associates and say, “How are they selling?” And they’d said, “Well, look at the barrels. We are selling them by the barrel.”
And we would look at the shelves to see … Do we think that we could envision a place for Sideclick here? Are there any other accessories that are in our space? And there really wasn’t. And so that’s another way that we got excited. The closest thing to accessories for the streaming devices would basically be Hulu or Netflix subscription cards that would be hanging on the shelf. So we could see that there could potentially be a place for us in these big box stores, and so that was how we tested the waters to see if we would fit in there.
Felix: I like how you actually went into the store and tried to vision could this be a product that a store like this would carry, or the customers that are shopping at these stores, could they buy a product like this. Now Brett, you mentioned that you have this journal that you write in where you have lots of product ideas that you jot down. What made you decide that this was the one you would pursue? This is the one that you would 3D print and create a very early prototype to show around?
Brett: I think this one was most relevant to a rising market. It was also something that … A lot of my ideas I thought would be fun, but there was no urgency to them. They weren’t really solving big problems. So when this one came out, I realized that this one had a better purpose. This one was something I wanted for myself. So I realized I wanted to make one to see if I could pull it off, just as a prototype. And if i could pull it off … I mean I’m a pretty normal techy user, we just thought that other people would want it. So it was one of those ones where, I think Jenn mentioned earlier, we just didn’t see any other competitive products.
And back to what Jenn was saying about Best Buy, I actually used to work at Best Buy through college, and they were always pushing accessories. So Best Buy was always like the … That was like our Holy Grail of retail, because I knew they’d want to push accessories toward this product. Toward a growing market that there weren’t really any accessories for. They used to push HDMI cables, pretty much everyone has HDMI cables now. So I wanted this, I knew that if I saw this on the market, I’d buy it. So I kind of just had to jump on it before someone else did.
That’s always the drive for everything in my journals. It doesn’t have to be now, but if somebody else does it before me I’m going to be really upset. So this one was the one that I just didn’t want to wait any longer.
Felix: Makes sense. You mentioned that these big box retailers like Best Buy push accessories, and the fact that this was a product that, I guess worked alongside an accessory, or it could be considered an accessory itself, what made you … What is attractive about being in business with selling a product like this like an accessory?
Brett: Well I’m not sure if it is that. I always a little wary with having a product that had a niche market. I was always worried that we were limiting the type of people we could sell to. But I think what we found is that the niche market is really big and growing. So it made marketing a little easier to focus. I think [crosstalk 00:12:37]
Jenn: I think we sort of even … As we would go further down the road in developing the product, we sort of realized that what we thought was niche was growing larger and larger. And what I mean by that is, at first we thought we were targeting, and we kept hearing the word “cord cutting,” right? And we didn’t know how many people were really going to be adopting that “cord cutting” lifestyle. What we came to find out, is even if you aren’t a cord cutter, and you still subscribe to cable, many millions of people who still have cable, and let’s say they have a smart TV where they can still access their apps through their smart TV, still are going out and choosing to buy ones of these streaming devices. Either it’s for a separate TV, many people have more than one in their house. So it just sort of seemed like it the demand for these actual streaming devices, which was growing and growing and growing, and so just the excitement to see that you could be an accessory for something, and really solve a problem.
It’s really not something that is … Obviously it’s a luxury of some sort, you couldn’t just reach over and get another remote, but we have two small kids, for instance, and having this product on our streaming remote, the Sideclick, really truly makes the TV watching experience easier for us as parents. It makes it easier for them. So it was very exciting just to think that we had a product that was attached to something that was so big but was truly something that was a problem solver. I think that’s kind of what kept us going. But we felt like we were snowballing in a good direction.
Felix: Makes sense. So I think one of you mentioned that by focusing on a niche, even though it was a very fast growing niche, makes the marketing a lot easier. Can you say more about this?
Brett: I think it really started with our first Kickstarter campaign. We launched Kickstarter, we took a long time to get ready to launch Kickstarter. I think I started developing the product in, it was either January or February of 2015. We launched our Kickstarter campaign in April, and what we did is we launched, and then thought we’d tackle the initial … And now I’m talking about marketing more and getting the word out for our Kickstarter campaign. Immediately we started targeting all of the media who were writing about cord cutting and who were reviewing these devices. So we started looking for all of the media contacts that we could find and we spent, out of a 30 or 40 day campaign, we spent every single day of it, for several hours, finding new contacts, writers, bloggers, whoever it was and targeting those people and telling them about our product.
So that was the start of our marketing campaign.
Felix: Gotcha, so you were able to identify what these people identified themselves as and look for people who were writing towards that audience, to reach out to.
Jenn: That’s exactly right. So there was a lot of momentum in blogs, and big publications like [C Net 00:16:19] and Tech Crunch. Everyone was writing and reviewing these streaming devices, and talking about … So they were sort of like the reviewers who were reviewing the gadgets themselves, who would be interested in it in more of a hardware aspect of how it was working with the streaming divide. There was also a segment of the media that was just discussing the cord cutting movement, who could also be interested in our product because we are showing how there’s more commerce sprouting from the cord cutting movement.
There was a third population of writers who were just kind of interested in Kickstarter projects and what’s new there. So we sort of built this really robust list just from searching people and what they were covering. So we’ve sort of learned that if they’re already talking about something in the industry, they’re much more likely to talk about your products. And what I’ve learned is these writer and bloggers, they’re looking for content to write about obviously, so if you can make a connection with them by saying, “Hey I really enjoyed your review of the Roku 2. Let me show you how our product attaches to it.” So it was kind of easy to grab their attention by knowing that we were already in their wheelhouse.
Felix: So you mentioned three pretty distinct groups of people, you have the tech hardware reviewers, you have people that are just talking in general about cord cutting, and then you have the people that are covering Kickstarter that you reached out to to help promote your Kickstarter campaign. Out of these three, can you talk a little bit about the benefits or advantage of focusing on one of the three? What are the pros of focusing on reviewers verses people just talking generally about the space, verses people talking about Kickstarters. Did you notice any differences in the results of working with them?
Jenn: Yeah, we, this would probably be a good opportunity to … we sort of were looking at the analytics that we could see that were coming in from who was referring the most people to our Kickstarter campaign, and two of the referrers, who were referring a lot of traffic to us were these little niche websites. One was called “Cord Cutters News,” and the other was called “AFTVNews.com.” And so these are just two separate bloggers, basically, that have turned their website into an entire space for cord cutting information.
So, “Cord Cutters News” is our friend [inaudible 00:19:11] who we’ve become friendly with, and he is just, his life is cord cutting. He has made himself the know-all in the industry, and so by him reporting on us, we’ve sort of connected and formed a great partnership, because he keeps us up to date in cord cutting news, and everything affecting our industry, and then his audience of cord cutters was a great testing ground for us, and we got a lot of Kickstarter backers that maybe normally would not have known about us, but they did specifically just because they were interested in the content that he was providing.
And the same kind of goes for the other one, which is called “AFTV News.” It was a website kind of solely dedicated to Amazon Fire TV enthusiasts, and so, just by kind of really taking the time to connect with those content providers, and talking with them, and taking the opportunity to get to know who their viewer is, and the types of things that they wanted, I think we were able to gain a lot of insight into the type of customer that could potentially be a Sideclick customer.
Felix: That sounds-
Jenn: -If that makes sense
Felix: -Yeah, yeah, it does.
So, before we get into the Kickstarter stuff, I want to talk a little bit about the early prototypes. So, Brett, you mentioned that you created this prototype using a 3D printer. I think this is a very useful avenue for a lot of people that want to create a hardware product that want a prototype, a product that doesn’t exist yet, but doesn’t have a lot of the funds to go through a manufacturer, or maybe just wants something very early on.
Talk to us about this process. How did you … What kind of 3D printer were you using, what kind of software were you using, how do you begin going down that route of printing your prototype with a 3D Printer?
Brett: Well, so, I’ve been through this through my work, through my day job, I’ve been through this in the past. However, most of the products I did were prior to available 3D printers, or general use of 3D printers, they were all commercial, larger, $10,000 machines. So, I used to pay more for a single prototype part than I did for my entire 3D printer. My 3D printer is a printer bot, it’s called a simple metal. It actually was a Kickstarter campaign. However, I purchased it after the company had launched, after the Kickstarter campaign.
So, I basically designed all the parts myself, just using 3D modeling software. I printed them on my … I get a lot of trial prints, because all of the remote controls that I attached to have very unique shapes, some that are harder to grab than other ones. Very rounded, glossy surfaces are hard to get a good snap onto. So I did a lot of trial runs where I just printed out maybe the border and tried to slide it over and kept tweaking it until I had a pretty good fit. Then I’d work my models a little more, and I was just printing shells at the time, clips and shells of remotes.
At the same time, I had started to buy a plethora of remote controls off of eBay and Amazon, to use as research. I kind of knew that I wanted one of the style universal remotes where you just point them head to head and they teach each other, instead of the kind where you have to pull out a code list with all of the manufacturers and 1000 codes for different models.
So, at the same time that I’m doing these prints on the shells, I’m looking for off the shelf kind of remote controls that are available that are already kind of small in form. I had the mechanical, the design background, but I did not have the electrical background.
So, the whole time … And, I think when I got one that I thought was pretty good, I printed a prototype that looked kind of large and bulky, but I took the guts out of a remote control and kind of put them inside so I had a working prototype, that I used just to kind of play around with and see how it worked and how I liked it.
So, through that I kind of just kept on refining the process, and ended up … and, I know we were about to get into the Kickstarter campaign, but it’s kind of interesting when we talk about that, I came up with a whole line of prototypes, and then after our first Kickstarter campaign, we ended up kind of completely changing the design, which I can talk about later.
So, through this … and I think the 3D printer was relatively new to me at the time, as well. I didn’t buy it for this project, I had bought it just prior to kind of tinker with. So I was still kind of learning the machine, the in’s and out’s of the machines, using the standard software that comes with it. I can’t remember, I think it’s Slicer is one of them, and … it’s all kind of freeware that you use to drive these, and I printed … I still can’t let them go, I have boxes and boxes of prototypes just because it has some sort of sentimental value to me.
Felix: Yeah, some kind of evolution of your pride developing. I think I would keep them too, if I were you.
Brett: Yeah, exactly.
Felix: So you had these prototypes made. Now, how much did you have, I guess, ready by the time you guys decided to launch the very first Kickstarter? Did you already have a working prototype?
Brett: I had a working prototype that was not visually appealing. And then, I had, for the first campaign, I had four prototypes that I had basically made that were shells, they had no guts. And I had printed them. And because I’m better at working with my hands than I am with Photoshop, at least back then, I actually spent time using Bondo, which they use for like, body filler for cars. And I was wet sanding them and spraying them, and I ended up with, if you look, in the first Kickstarter campaign, those are all just kind of hand-built prototypes that have a skeleton of a 3D printed part.
So, and then I had one that we didn’t even show in the campaign that was a working prototype.
Felix: Cool, okay, yeah, so we’ve been talking about the first campaign. When we say the first campaign, what happened was that you guys launched two campaigns for the same product, right? For the first one you had a goal of $150,000. And yeah, talk to us about what happened. What happened between, I guess, the first campaign and then the second campaign, which I think launched very quickly after?
Brett: Yeah, so the first campaign, which we did launch in April, I had four models, and we had a model for the Roku at the time, the Amazon Fire TV player, the Amazon Fire stick, and the Apple Generation 3, which is the little silver, slim, metal remote that Apple used to make. And I had a dedicated remote control and design for each of those units.
We had asked for $150,000. Because of what I told you earlier, we kind of started doing our marketing Day 1 of the campaign, and it kind of lasted throughout. We kind of had a slow increase of backers. It didn’t start off very quick. It kind of rolled in.
We were picked up by Uncrate, which ended up being one of our largest funding days of our campaign. I think they were one of our bigger … We had CNET articles, Gizmo, Gadget, all of those. They were great, very successful, but Uncrate I think was our biggest one. I think they have some loyal backers.
Regardless of all the media that we got, we still never reached our goal of $150,000. However, I see that, in the long run, as a blessing, because during our campaign, Roku a line of remotes, a line of devices, a brand new line of devices, and introduced two new remote controls.
So, now I’m thinking-
Jenn: So did Apple TV.
Brett: Oh, I’m sorry. So did the Apple TV. I’m not sure if they had launched yet, but they had announced that they were going to launch a new one.
So, meanwhile, my cost predictions, for all of my tooling and my plastic parts, now just almost doubled. And we already didn’t hit our goal for our first one, so I kind of went back to the drawing board, and I started thinking about how I could reduce the cost of my tooling, and make a more simple design.
So what I came up with was a remote control portion, our universal remote control portion is really just a column of eight buttons, and it’s a slim remote control that you can use just by holding it in your hand. It doesn’t need to be attached to the streaming … It has its own batteries, its own power, everything.
And then what I came up with, which is really unique to our system, is an interchangeable clip system. So every one of our remotes, now, every one of our models uses this same master remote, or the same design of remote, and you just could slide off a clip, and then replace it with another clip.
So now, I just cut my tooling costs down significantly, and we also kind of lined ourselves up to turn around new models quicker, because there’s less development that’s necessary, so-
Felix: Definitely see the blessing and the curse with that because now you had the opportunity to not only create the model that works for these new models of remotes that are coming out, but then, of course, creates that much more universal for future applications of this technology.
Brett: And the blessing was just because I felt like, if we did get funded that first time, I would’ve felt obligated to deliver the product that I originally had proposed, and it would’ve ended up costing us a lot more.
Felix: Gotcha. So then, what happens when your … Well, we’ll kind of talk about it. So you had your goal, $150,000, still raised a ton of money, I guess on paper, for $109,000. What happens when you don’t reach your Kickstarter funding goal, does nothing happen?
Brett: Nothing happens.
Jenn: Yeah, nothing happens.
Brett: Backers get their money back, they just … Everything stops. Backers get their money back-
Jenn: They never get charged, is actually how it worked. They don’t get charged until it’s funded.
Brett: That’s true, yeah.
Felix: Gotcha. So then what did you guys do, because you relaunched the campaign pretty much immediately after that first Kickstarter ended, is that correct?
Brett: It felt like a lifetime, because it was three months, but meanwhile we had just kind of put ourselves out there.
Jenn: And we also were … I was going to say, we also … Brett was immediately kind of excited, and we sort of knew we had a better idea, so we were working really hard to kind of redo our campaign in order to launch, but the really nice thing that we experienced from the first campaign, especially when we failed, is that we had a very vocal, loud, cheering section of backers that were really disappointed that we failed, because they wanted the product.
So, we sort of constantly kept communicating with these backers, and we knew, we felt very confident that if we were to relaunch and we could get our costs down, we felt confident that we could close to match the enthusiasm that we received, which was, you know, we did a good job. We had over 2,000 backers, and over $100,000. So we knew that we could count on the support of many of those backers the first time, that they would kind of continue with us to the second campaign, which in fact happened.
So that was kind of a great way to sort of … They were excited, they wanted the product, and they kept with us while we sort of figured out our developmental stuff.
Felix: Yeah, so the second campaign that was launched basically raised the same amount of money, but this time you set a lower goal of $80,000 and ended up pretty much raising $109,000, almost the same exact amount that you raised last time, from another 2,651 backers this time.
So, was it much easier to raise this … or, hit this goal the second time around? Were you able to contact the people that funded you, or attempted to fund you in that first campaign?
Brett: Yeah, we recontacted everyone and it was easier for us because we had already established those contacts. However, you lose some momentum [crosstalk 00:32:22]
Jenn: Yeah, I think we made like $60,000. We did lose some momentum. However, when we first launched the second campaign, I think we made like $60,000 in a day and a half. It was immediately the people who were there the first time who were excited, they immediately jumped back in. So, it really helped to see our excitement because we were literally just watching the numbers climb and just feeling excited, like, “Okay, they’re with us … We’re going to make it this time.”
And of course, you had to kind of go out … Not everyone would recommit, some people don’t realize that the first product campaign failed. So you still have to go through the work of going after the press and we still did all of that work to remind people that, okay, our first campaign failed, but here we are again with the second one. And it’s harder, you have a challenge, it’s a more steep hill to climb, especially when you’re pitching the media, because if they covered you for the first campaign and you failed, they’re probably not going to cover you for the second one unless you’ve shown something that’s really newsworthy and something that’s changed quite a bit from the first one.
So … luckily we had really enthusiastic backers, and that kind of helped us get funded, I think, the second time around.
Felix: Yeah, so I was going to ask, what did you guys do when you needed to hit the press again? Because obviously, you still had a lot of support from the people that were already backing you the first time, but now of course, you still, like you were saying, you still have to hit the PR process to get that kind of coverage. Were you approaching the same people, same bloggers, same reviewers again this time around or did you try to go after others that didn’t cover you the first time? ]
Jenn: We were constantly building our list. I used to joke with Brett that if all else fails, we’ve built a really robust media list that we could probably sell, and have that be a revenue stream, because we really were constantly building this list of bloggers and their Twitter handles and everything, so we had a really robust list.
So, we had a pretty great success rate in having people write about us and things like that, but even that success rate was a small percentage of our overall list that we had built, so we just kept emailing, kept tweeting, and we did have some people that maybe saw us and moved on and they did cover us the second time around.
We weren’t as successful the second time around in getting as many media pitches that we did the first time, but we still did get new ones, and it’s a numbers game, really. If you send so many emails you’re going to have a success rate, but it does take quite a bit of effort to keep trying to get in their forefront.
Felix: So now, after you hit the goal this time, and you raised over $100,000, what was the next step? What did you need to use the money for?
Brett: Well, that money was pretty much all used for tooling, and for development. So, I had a contact locally who helped me develop the PCB board for our design, and helped me get those prototypes. So, I was paying him on a contract rate, and funding all of the prototypes for that.
Then I started working with a manufacturer, and making some molds. They started making some prototypes, and that process started off really slow to start off with. I think until you build up a reputation with your manufacturer, they kind of take you as a lower priority.
So getting the initial prototypes made took a little while, and we started slowly making new molds and it was a back and forth process. We’re making our parts in China, which is relatively easy, especially since I have a day job, and I get to communicate with China at night time. But the flow of information back and forth, and even the flow of parts, was actually much smoother than I had anticipated.
So, we worked for a while improving the fits and the snaps and everything, and that was a pretty long process doing that. So, the tooling … Between the tooling and the development of the product, I think we used up almost all of the Kickstarter funding between those and … I can’t remember if it paid for the first round of parts, but we definitely needed more funding after that, that was not nearly enough to get going.
Jenn: Yeah, and we made another $20,000 in pre-orders, after that. But even that was … We were needing more money at that point.
Felix: Wow, so you mentioned, I think in a previous interview, about how one of the things that you really figured out how to do was to leverage the support of your Kickstarter backers after the campaign ends to drive reviews and help build momentum and excitement about the product. Now, I think we talked about this, between the first campaign and the second campaign, how you were able to keep that momentum going as much as you could. What did you do after the campaign ended the second time to successfully fund the campaign. How did you keep the momentum going and people excited to essentially stick around for the actual finished version of the product that could be bought on your site? How did you guys keep the momentum going?
Brett: I’m not sure if we really did much. We made sure that we kept in good standing. I spent too much time on Kickstarter, especially watching the campaigns that like, go up in flames because they either stopped communicating with their backers or they’re two years late on their campaign, so we really wanted to make sure that we stayed in good standing with our backers, in both good and bad updates. So we made sure, I think Jenn was really the one who kept us on track there, making sure that we had an update at least monthly, if not more, to our backers.
Jenn: Yeah, and luckily, I think most … I really was pleasantly surprised in the type of backer that backs projects on Kickstarter. I’ve found that, overall, the majority of backers really understand the spirit of Kickstarter. They understand that it’s rare that products meet their production schedule, even though everyone goes in with the best of intentions.
There is a small but vocal group that doesn’t really understand the spirit of Kickstarter and they just understand that they paid for a product, and it’s been 60 days since it was supposed to be delivered, and they’re angry, but for the most part I’ve found it to be a very positive, nurturing group of people that really want you to succeed. And so that was kind of … It gave me personally just a lot of excitement, because I used to dread having to give updates that we were behind again for four weeks, or however it was, but for the most part people really did understand, and they wanted you to take the time necessary to perfect the product.
And in the end, when we did deliver a product, everybody was really satisfied, and super happy. We got so many comments saying that we were so glad we took our time. And we were … How many months did we end up behind, Brett? It was like, four months, maybe, was that it?
Brett: I think it was about five … yeah four or five months behind.
Jenn: Yeah, and so at the end of the day, I think that our average, I think at least 80% of projects are at least that late on Kickstarter. Every creator goes in with sort of a naïve optimism that they can do it, and then you run into all of these roadblocks.
But, I think because we had really good communication with our backers, and we ended up delivering a really great product, they were excited for us and excited to be in at the ground floor. And, we tried to do little things for them here and there.
For example, on our packaging, our first round of packaging on the back, in big letters, it was like, “This was brought to you through the support of 2,600 backers on Kickstarter, thank you backers.” We always tried to kind of make them feel that we will always remember our roots of how they made it happen for us.
And also too, we decided internally that … Because, for instance, the Apple TV product that came out with a new device, and we had backers that kind of wanted to be able to have a version for their new, upgraded Apple 4 product that they had when they pledged, and we costed everything just solely based on the Apple 3 model … So we kind of made a decision internally, which I think was a really great decision that we made, that we decided that we were going to offer all of our backers a free adapter clip for the new Apple TV 4 once we had that developed, and they would just have to pay a small shipping fee for that, but that way it allowed … Because it was a modular design now, it allows them to upgrade their Sideclicks to their new Apple 4.
And so, it did cost us some money to do that. However, by making a large group of people happy, when we sort of announced that product, or when we announced that offer to them was the same time that we asked them to help us with our reviews on Best Buy, because we had just started our relationship with BestBuy.com, and we had a really big response from our Kickstarter backers. Like, many of them went ahead and filled out the paperwork and got their free adapter clip, and many of them went to Best Buy and reviewed our products, and we had a really good … Our merchant team over at Best Buy was really excited at the reviews that were coming in.
So that was kind of like a really great leveraging of our supporters from the beginning and they were helping us grow.
Felix: Yeah so you were essentially giving out free samples to your most dedicated customers and they paid you guys back, it sounds like, much more than you guys would have even wanted, by writing all these reviews for you, which then helps bolster your relationship with Best Buy, and of course drives more people to purchase.
Jenn: Yeah, absolutely.
Felix: Cool, so, I didn’t realize you guys were selling or working with Best Buy, their website. Are you also in the retail store? Or was this deal specifically for the .com?
Brett: We’re actually … We’re in the stores as of about two weeks ago.
Felix: Nice. So how did that get arranged? How did you … Did you have to work with a buyer to get into a place like Best Buy?
Brett: We went to … I was somewhat reluctant, and Jenn kind of talked us into going to the Consumer Electronics show, which is in January every year, in Vegas. We went in January in the year of 2016. There’s four different venues, four or five different venues out there, and one of them they call “Eureka Park” which is for startups, I think you have to meet a certain criteria in order to display there and they have lower costs for renting the booth, and give you some additional perks.
So we set up a booth there, and went out not really knowing what to expect. And, through those four or five grueling days of standing on our feet and talking to hundreds of people a day, we met contacts for all of the major retailers, a bunch of smaller websites, talked to a lot of individuals who were just interested, talked to some media, but one of the people who came to visit us was a sales rep who’s out in Minnesota who reps for both Target and Best But. And we started a relationship from that point on, and it took a while. I mean we just got in the stores. I think we were up on BestBuy.com probably in-
Jenn: Like July
Brett: -Like July. So even to get to that point it took almost six months.
Jenn: Yeah so we had … We sort of started slowly with them, it was kind of like we started as soon as we had ordered … Because when we first went to the Consumer Electronic Show we didn’t even have a product yet. We were still … At that point we even had a big PCB problem, we were having to kind of start over with our electronics component sort of thing.
So things were not cemented and we didn’t have orders that we could make on the spot, which was kind of like everyone in that Eureka Park section. But as soon as we got our products in we sort of started with BestBuy.com and we were told that we needed to meet a certain metric of sales per week on their .com before they would entertain placing us in the store. And so, it was constantly sort of meeting little milestones with them, and then once we met those milestones it was then the conversations of being put into the store happened.
It’s just working with a big box retailer, as well, is like … It’s learning a new language. There’s so many requirements and if you’re not from the retail industry or space, I really do describe it as you kind of have to learn to speak whole new language. There’s just different criteria and different steps that you have to go through to get involved with a big box store like Best Buy, so, and all of those things are very … They take a lot of time. So, we got really lucky because we had met a really great team of sales reps that, their specialty is that they have the relationships already, so I feel really good that they’re sort of our face to face, they’re located where the merchant team is located, and they’re sort of helping us navigate the process, but at the end of the day it just takes a long time.
Felix: So can you maybe go into some details about some of these steps or milestones that might trip other entrepreneurs up or something to look out for if you are working with a big box retailer? What are some things that were maybe challenges, that were more difficult than others to get through?
Jenn: Well I think one of the things, and Brett, you can kind of speak to it from your more technical side, too, but for me I think that what entrepreneurs need to know when they work with big box stores is that you need to expect to spend a lot of money with them before you’re going to start seeing any money back. And kind of what I mean by that is, it starts with things like insurance requirements. Their insurance requirements caused us to need to up our insurance, so that’s several more thousand dollars that we need to spend in insurance to be a vendor with them.
Also, there’s something called like data pool synchronization where you are inputting your SKUs, and all of your product information that you have from your GS1, into a data pool, and they subscribe to the data pool and it’s just how the information is exchanged from the vendor to the store. And you also have to pay for a subscription to the data pool, which is also several thousand dollars.
Then, there is an EDI, which is how they submit purchase orders back and forth, and accounts receivables and accounts payables information. That is a subscription service that you have to pay for.
Also, which is quite interesting and frustrating, is that in order to see your daily sales reporting, you have to pay and subscribe to a Metrics and Reporting report. So there is a lot of costs associated, and so it’s risky because-[inaudible 00:49:14][crosstalk 00:49:14]
Brett: And you have to pay for all of this before you ever see a dime. That’s the hardest part.
Felix: Did you have anybody that was helping you out along this process or were you just working directly with Best Buy and then every week you were like, “Wow there’s another bill we have to pay.” Did anyone kind of eventually come along and show you the way?
Jenn: Our sales reps did a really good job of pushing us along, because I have to say, if we didn’t have the sales reps that constantly were sort of like, “Listen, this is … The sky is the limit, we’re going to do well” they kind of needed to push us along, but even with them pushing us along and their expertise in dealing with other customers, it’s a lot … You really, at the end of the day, you’re the one that’s figuring out the data pool when I’ve never had any experience with any sort of data information and things like that. So, you really are learning a new language, and you just have to … There’s many days where I felt like all I did all day was pay money to Best Buy or go through some step that I just wasn’t confident that I knew what I was doing, but now that I’ve gotten past that and we’re starting to see like our receivables grow, it definitely feels worth it.
But really, that could be a big barrier for a company, not knowing how labor intensive it is to work with a big retailer, and how expensive it is, because we have 90 day payment terms. So all of that money that we were having to pay for the services like what I described, that was months ago, before we even … We were months away from having our first purchase order, and then once we get a purchase order it’s 90 days, so it’s quite a lot of cash up front.
Felix: So lots of long term projects for you guys, it seems, with this, working with Best Buy and then the two Kickstarter campaigns that you had to launch. Now, one thing you mentioned in the pre-interview was how you guys have both learned how to properly build a project schedule and timeline these days. Tell us more about this, like how do you begin to approach a large project these days?
Brett: I think I’ve only learned by making mistakes originally. I think I could help someone build a better project schedule, but I miss the mark a lot. I think you forget about certain things, like ocean freight from China, depending on where your warehouse is, can be anywhere from three weeks to five weeks. That I just completely kind of left off our schedule.
The back and forth of making … Every time I thought we could make iterations on our design, and our molds, relatively quickly. However, they have to put the machine that they modify, or machine the parts to, is a completely different machine than what shoots the plastic parts, the injection molding machine. So they have to take that off and then get it encubed in new machining and then put it back on, and every time you do that you’re getting charged and it’s another week. And we went back and forth because, being somewhat of a perfectionist, I wanted the snaps to be perfect. And I wanted everything to be perfect, and at a certain point, I think we just made the decision saying, “Everyone’s going to be happy that they got this product. We could continue to improve things, but we’re at a point where we’re ready to launch and we have to, we can’t waste any more time.”
Jenn: Right, right. I was watching Shark Tank and Mark Cuban once said that perfection is the death of profitability, and so I would have to remind Brett of that, you know, sometimes, that yes we wanted to deliver a great product, but we can’t do it at the sake of our company’s ultimate success.
Felix: That makes sense. Can you say more about this? I think that’s a state that a lot of entrepreneurs get caught up in where they want to make the product they’re working on perfect before they launch, or make the site perfect before they launch, or make the Kickstarter page perfect before they decide to launch it. How do you recognize when it’s “good enough,” I guess, to go live?
Brett: I think you have to do proper testing. You have to make sure that it holds up to the claims. I mean as far as this goes, we actually, something I didn’t even breach yet, I ended up … One of the reasons we had a major delay in our product being delivered was I had a PCB made, the one that I had designed locally, that was unreliable, and we had problems, and I didn’t even know that until we had made almost 3,000 of them. So, I got this news, I got samples and had issues. I think I had gone to China for the first time to meet with our plastic supplier, our electronic supplier. I tested some out, approved them, we had like 3,000 made and I got samples right before we went to the CES show in January, and none of them worked properly.
Jenn: It was very stressful.
Brett: That was an example of something that was inexcusable.
Jenn: Yeah, and obviously you cannot move forward with a product that doesn’t work.
Brett: That would’ve put us out of business, having 50% of the people who get our product have trouble programming our remote would’ve been devastating. But maybe one, we’re compatible with, at this point I believe it’s nine different streaming device remotes, having one clip that fit a little looser than the other eight is something that I had to deal with, we had already done two revisions of it, every revision was costing me two to three weeks, and it was good, it just wasn’t perfect. So, you really had to weigh out the consequence. A loose clip might get us maybe one or two lower reviews, where a bad electronics board would’ve crippled us.
So, we had a really good manufacturer. They worked out a lot of the problems internally. They worked out any flaws in the design, they helped tweak stuff to help make it better. More manufacturer role, and we got to a point pretty quickly where we were very happy with the product, something that I would be proud to put our name on and also something that we’ve had, and I’ve talked to some friends who have the same thing, who have had some of the original models that have been out for like two years now, and they still … Same set of batteries, and they’ve always been attached to the remote, and it’s been two years and they have no problems with them. I guess it’s been about a year, year and a half maybe. So, it’s really just use and proper testing, and knowing your-
Jenn: And I think that we sort of complement each other, too, because Brett is more of a perfectionist and I tend to want to push a little bit, so I think that we kind of complement each other just in I can kind of remind him that this is an area that we can perfect as we go down the line, but we can’t afford any more hold ups. So we constantly sort of weigh the pros and the cons with adding more time versus tweaking a product, but I think we have sort of learned that sometimes you just have to go. Or someone else will.
Felix: Yeah. I think that working with a co-founder that can balance you is very important. The last thing you want is two perfectionists or two people that are ready to ship things right away, both working on the same team because you don’t have the same kind of balance. I think that that definitely works well for both of you. So thank you so much for your time Jenn and Brett. So, Sideclickremotes.com, again, is the website that is the store. Anywhere else you recommend listeners check out if they want to follow along with any new products that you guys are coming out with?
Brett: We always launch them on our website first, and that’s, like you said, sideclickremotes.com. We try to get everything up on Amazon, as quickly as possible. We’re releasing a new model right now for a new streaming device called the Me!Box, and then we’re going to get that up on Amazon soon, we’re already selling them on our website. So, Jenn does a really good job at keeping our backers up to date, so-
Jenn: Yeah, and we’re also on Twitter and Facebook, so you can find us at sideclickremotes.
Felix: Awesome, yeah we’ll link all of that in the show. Once again, thank you so much.
Jenn: Thank you so much.
Brett: Thanks a lot for having us, Felix. Nice talking to you.
Felix: Here’s a sneak peek of what’s in store for the next Shopify Masters episode.
Speaker 5: Creating affiliates through people that have organizations and have followings online, makes things a lot easier. Instead of actually having tangible people on the ground trying to move your product around their gym or whatever it may be.
Felix: Thanks for listening to Shopify Masters, the e-commerce marketing podcast for ambitious entrepreneurs. To start your store today, visit shopify.com/masters to claim your extended 30 day free trial.