When Crowdfunding Goes Wrong, But the Product Is Just Right

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Entrepreneur | Eric Samson | Apr 8, 2015

Kickstarter crowdfunding optionOn Kickstarter, success stories such as Pebble Time and Coolest Cooler get all the attention -- and for good reason. Each created a newsworthy product, coupled with compelling marketing materials to propel these mere concepts into crowdfunding superstardom.

Crowdfunding is undoubtedly hot: In 2014, backers pledged more than half a billion dollars to projects on Kickstarter alone. Yet, while there are still a number of high-potential products that fall flat on their face, there are also those that initially fail, then find ultimate success.

Below are two stories of two failed crowdfunding campaigns that illustrate how success can happen when you are persistent in pursuing your dreams, and when you strategically use marketing to give your products the attention they deserve.

A failed first run and a confident second one

To inventor Leo Knight, his creation Campfire in a Can seemed like a perfect fit for the Kickstarter community.

Campfire in a Can is a neat product -- a portable propane fire pit -- that aims to enhance the outdoors experience. With that and an ambitious pledge goal of $80,000, Knight launched his first crowdfunding project on June 3, 2014. But just three days shy of the July 31 campaign deadline, he decided to cancel fundraising after receiving only 297 backers and nearly $38,000 in pledges.

Defeated but undeterred, Knight spent the remainder of 2014 planning his comeback. On January 6, 2015, he introduced a new campaign to revive Campfire in a Can. The revived product, using updated marketing content, including a new, shorter promotional video, new pricing tiers and more in-depth text descriptions, Campfire in a Can this time raised almost $125,000, far exceeding its conservative funding goal of $48,000.

Ditching crowdfunding and taking a product to market

Physical therapist Akiva Shmidman first conceived the idea for what would become BeActive Brace in 2003. Shmidman, my close friend since elementary school, released a prototype for the pressure brace in 2008, testing it with family members, friends and patients who experienced back pain.

Over the next five years, he spent late nights conducting research and development and building out further iterations of the product. In 2013, Shmidman felt ready to sell BeActive Brace to a larger audience and turned to crowdfunding to market and promote it. On May 20 that year, he launched an Indiegogo project. But by the campaign's end date of July 9, Shmidman had raised $1,170, a mere 2 percent of his $50,000 goal.

Reluctant to quit, he decided to take his business elsewhere. “I knew nothing about marketing or how to run a business, but found out the hard way that the crowdfunding community is more interested in products that represent the bleeding edge of innovation," Shmidman said. "A back pain-relieving brace solves a very old problem crowdfunding supporters just weren’t interested in.”

View:  Is Crowdfunding right for me?

Realizing his true target audience was not among the backers who frequent Kickstarter or Indiegogo, Shmidman found himself browsing an online forum for inventors to discover ways to distribute what he considered a a life-changing device. Online, he heard about an inventors' speed pitch in Philadelphia and made a commitment to attend. On stage at the event, Shmidman and his product wowed the audience when a judge yelled, “I have back pain,” and reported feeling instant relief after trying BeActive Brace.

Top Dog Direct, a direct response marketing company, then approached Shmidman. And several meetings later, the two parties signed a licensing agreement which has placed BeActive Brace in-store at Walmart, Walgreens, CVS, Rite Aid, Bed Bath & Beyond and other retailers across the nation. In 2014, BeActive Brace was the most successful product sold under the “As Seen on TV” category. Within 10 months, demand for the brace exploded; together, Shmidman and Top Dog Direct have sold well over one million units.

Final thoughts

To turn Campfire in a Can from a campaign failure into a crowdfunding success the second time around, Leo Knight hired a professional to help him recreate the Kickstarter video. Noting, in an interview with LaunchLeader.com, how he had brought in a professional news videographer, Knight recommended, “Hire somebody to give you a hand. It doesn't have to be a big media company.” While some may see this as a luxury expense, it can help you convert viewers into customers.

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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 950+ 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.

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