April 24th, 2017
Building a better brand through crowdfunding
Jamil Kahn was a software developer with no background in the fashion industry when he came up with an idea for a new kind of parka that would have gloves, hat and scarf built right in.
“It was prompted by the inconvenience of having to shove my gloves and scarf in my coat all the time,” he says. “It just made sense to make them part of the coat. And the technology is there to make it happen, so why not?” The upshot: in 2015, Kahn quit his job to concentrate on his Smart Parka.
The question was how to fund it. Going to a bank wasn’t an option. “They want to see three years of cash flow,” he says.
While he could have attracted some angel investors, Kahn opted to crowdfund the venture. For less than $1,500, he hired a videographer and crafted a catchy video that showed some of his friends wearing the prototype jackets.
Kahn’s launch became the most funded campaign ever run on Kickstarter Canada, raising almost $3.28 million to get his company off the ground by pre-selling the coats for about $300 each (they will retail for $600 to $750).
Even better, he created the kind of buzz that got him noticed by the national — and even international media. And all those backers were potential brand ambassadors, showing the video to others and talking up the product. “Kickstarter can turn a company into a brand for zero dollars,” Kahn says.
Craig Asano, founder and executive director of the non-profit National Crowdfunding Association of Canada, agrees. Crowdfunding can be “a tremendous marketing platform for small businesses and startups in particular,” he says. “With crowdfunding, you’re really, in a sense, going public, in that there are a lot of eyeballs tracking you.”
While many small businesses fly under the radar of conventional media because they don’t have big marketing budgets, they often have “an incredible story to tell,” says Asano, “and crowdfunding allows journalists to connect with them.”
It’s also a great way to assess risk by testing a new product or service before a full launch. “It’s a channel to your customers, who could become backers,” says Asano. “That is the best direct marketing: there’s engagement and interaction. People can ask questions of the founders.”
The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding stakeholders across the country. NCFA Canada provides education, research, leadership, support and networking opportunities to over 1300+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada. Learn more About Us or visit www.ncfacanada.org.