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Hello. Thank you very much.
Thank you for joining this talk.
We have just finished our Mr. Beam
Kickstarter campaign last week.
Right now we are here to share our
experiences on crowdfunding, a
Kickstarter hardware project.
And, well, here we go.
Well, first of all, has anybody
thought about crowdfunding
something?
Nice.
So we are here in Philip
and Phillip, that is here we
are software developers with a computer
science background, and
we're working as app developers
and web developers for a few
years and
somehow got bored to
start up, didn't go anywhere.
I was working as a freelance freelancer
and well, we need something new
and, uh.
Yeah, and something new to to learn
and everything and stuff like that.
And we have never done hardware.
We have no idea about crowdfunding finds
and finances, marketing, sales, anything
like that. So we thought, let's do a
project and go on Kickstarter.
A little bit about our project,
it was Mr. Beam, Mr.
Beam, do it yourself, laser cutter and a
great market.
It was born because
we wanted to dig a little bit deeper into
3D printing and we needed some
kind of goal, some kind
of projects to
not to just run around to
to get a little bit more focused on the
topic. So we decided
we built one of these
Do-It-Yourself laser cut off first
with a laser diet from a DVD burner.
Then later we upgraded it
to a one what class for
laser.
And while we decided
to open the hardware and
software, we didn't release
very much yet we already released a
little bit software, but there
are still some cleanup to do in the
hardware stuff.
We managed to send out the hardware
rewards for for all the backers just
in the week before Christmas.
And now we're working
on the backlog backlog.
Well, everything was done
with open source software and
that was an open source hardware.
And that was one of the reasons why we
wanted to open source our project as
well, because we
started.
October last year and right
now we just finished the
whole Kickstarter thing, and
we wouldn't have been that fast without
all these things you see here
that open, Scott, for engineering
the 3D parts,
the key cut for making electronic
circuits
Inkscape double to print out
all these projects.
And we want to say a big thanks
for everybody who contributed in that.
So we are said
we chose Kickstarter, but in the
beginning, we didn't know where to go on
which platform to put it, um,
and we looked
at different ones and
but we didn't really know if anybody
wanted to have a home built the
DIY laser cutter.
So we went we went to Safeway
and chose just the biggest one because
Kickstarter is the market leader or was
at the time.
Uh, yeah.
And so to be safe, we chose Kickstarter,
which made everything a little bit harder
because in Germany there's no
Kickstarter representation.
So we had to use
his brother, who is a
Grinker. He has a green card and lives in
the US and set up all the
things you need, like a bank account and
Amazon payments account and
all those accounts, basically.
And the company
and the end.
And that made it possible for us to
to have a Kickstarter project.
Well, started from Germany.
Uh, and one
big preparation was a working
prototype, because at that time,
Kickstarter only accepted hardware
projects. If you could present a working
prototype, I think it changed in the
meantime.
But, uh, yeah, we we
worked like two months or something on
the on the prototype and then
got all the the bureaucratic
stuff set up and,
uh, went
on planning the whole thing and
how we set up the campaign.
So a big part was planning
or estimating the costs
we would have so that for example,
the hardware like the source materials
that we bought, stepper motors,
plastic parts, cables,
everything.
And also the money it
takes to to put all the things
to get together, understand the cogs, the
cost of goods sold,
as I've learned, and
also we had to do a more
prototyping and live
from from the money or take into
account the money we had to we used to
live off, uh,
and we almost forgot some other things,
like lawyers and tax advisers.
And then you also have the fees you
pay to Kickstarter and Amazon payments
and.
Yeah, then there's
taxes, everything.
So but we managed to
I think we we did a pretty good job
calculating the stuff.
I mean, it's not like we got rich or
something, but.
Well, we didn't get poor either
or not poorer than before.
And as we mentioned, we didn't have any
financial background that it was one of
the most difficult parts how to approach
that.
Uh, and luckily, we had a big
buffers in my
money and time was like
20 to 30 percent in both.
And we ended up using the
money buffer, like, right
away, spend it all.
And yeah, also
we have we took a little bit more
time, used up the
Bufferin in the time and also
well spent one and a half months more
than we planned.
But it's not too bad for a Kickstarter
project effort heard.
Um, and then if you have all the costs
together and you, you know what it's
going to cost you to to to produce all
the things and send it out, you need to
think of shipping.
Then you have to produce
a number that you put on Kickstarter
and also think of a first,
uh, total funding sum that
you want to like.
You don't want to even if you can
produce one one, one kit
for a reasonable
price, you don't want to
produce just one like you need
maybe at least 60 to go to get
it going, because it's not worth the
the the work otherwise.
And luckily, we managed to get
four times the money we asked for.
So we were good
on that.
We are second second task was
to present the project on Kickstarter.
Therefore, you need a video
that was quite difficult.
We read a lot about successful
Kickstarter campaigns and advisers and
whatever. And the most
interesting or the most important
part was the you have to tell a story.
You don't have to be professional, but it
must be some kind of story behind
it. And first of
all, we we made a video.
It was almost ready.
It was it was
edited until the end.
And we showed that some friends showed
it to some friends and it was
the first feedback.
So. Well, yeah, that's
nice. But
I don't care about if
the electronic circuit is working with 12
to 24 volts and.
Well, we had to have that.
OK, that's perfectly true.
We spent two months on the prototype
developing the technical details and then
we wanted to present all the things we
thought of and how we built it and
everything. But in the end, the people
didn't care about how it works.
More like what?
And we weren't interested
in what it does or what it can do.
And in that moment, we are so proud of
what you have done, especially if you
didn't have any knowledge about
electronics before.
And so you wanted to mention it
and. Well, we learned
it. OK, just just drop it.
It's not important at all.
Tell the story and show the use cases.
Show use cases is quite important that
the people are getting some idea quite
early in the video what to do with the
things you are trying to promote here.
Yeah, we we we revised
the video and made a set
second iteration and that was
quite better.
Also in Quixtar. I don't know about the
other crowdfunding platforms.
You can like preview
before before you actually publish the
project to the world.
You can preview the campaign and send
it with a special link to your friends or
colleagues or whatever.
So we didn't know about that
in the beginning.
Uh, yeah, but that's
very helpful because it just it's the
the step to the last and
it's really helpful to show it to
somebody else.
Well, then we started
the campaign at
two o'clock in the night because we
thought, well, the US just has,
um, finished work then
and that might be a good start.
We ended up without
some sleep for several days.
We got tons of emails
and needed a lot of coffee
to answer them all.
And even if
you make some fake news, people
are just continuing asking questions.
That was a really, really exhausting
time. First we thought, well, and that
time during the campaign, it was running
thirty two days.
We could develop the software further and
maybe make some research
about third party suppliers.
But we really needed
almost 24 hours for
supporting all the questions of answering
all the questions.
Finally, after the campaign,
you have to wait three
to four weeks for the money because
first, Amazon payments is collecting that
from the credit cards, from the
because sometimes the credit cards
fail, then Amazon payments is trying
that another time.
And, well, it's it
took some time until we we
really got the money and could order the
stuff we needed.
Another point is we got a lot of emails
offering help us.
There were somehow.
Really useful, someone saying,
hey, I'm a very friendly beta
tester, if you need just
give me a drop me a line.
Another one is the curious
one. It was some kind of hey,
we are Kari Feinstein style
lounge, and we want to promote your
product, um, a
next to other big brands like Gucci and
Dolce and Gabbana in the
and the Golden Globe Awards.
But I don't know
if this fits.
And so we ignore them
now. And then when we
finally had the money, we had to transfer
it to Germany and and
finally could start shopping for
all the good stuff we did.
But maybe if half of the stuff we
ordered or the parts in China
through Alibaba and all express very
helpful there.
It's a little bit, uh.
I was a little bit afraid before I
ordered the murders there, because it was
I was wiring like seven thousand euros
to a bank account in Hong Kong,
and all I had was an email saying
I will ship the murderers off after we
receive the money.
So we were lucky
we got all of our parts.
Nothing really was bad or
didn't didn't arrive.
Um, the Maurer's actually
they sent us some wrong tracking number
and they thought
was already delivered.
We checked the tracking number
was delivered somewhere in Singapore,
was really getting afraid,
but they sent us different tracking
numbers. It's kind of a strange feeling
if you feel the responsibility of
delivering some stuff to your backers who
are so kind to give you such a money and
then the money somewhere in Singapore.
Yeah. Then another
very, very, uh, new task
to us was to make an electronic
shield for the Arduino.
Um, it's basically a
combination of Stepa Drive US and the
laser diatribe.
In our case,
we made four prototypes
because if you make one mistake
in this part, it's not
upgradable with a bug fix release
or something.
Um, it has to work
from the first production run
and something that's really was really
new to us being software developers.
Yeah, don't not used to that.
And, um,
well, uh, the worst case happened.
We had the third prototype already tested
and it was super working
well.
But then the manufacturer of
one very important I see
said, hey, sorry, we discontinued
this chip.
And we said, oh uh, well
what now?
Then we had to find an alternative
and had to do a fourth prototype, which
luckily was quite good
from, um, at the first iteration.
We were a little bit experienced at that
point. So it went down faster.
Um, yeah. We have quite a few plastic
parts that we need for the inventory
and the well, for the whole device.
Basically we thought
about injection molding, but
somehow the numbers were high enough.
So it's too expensive or doesn't
make sense for a small number.
And we ended up 3D printing all this.
The parts was seven thousand
parts in the end, like 90 kilograms
of plastic and
spent our four printers, uh,
spent four months, uh, printing
it, spent maybe, I don't know, six
hundred hours maintaining
and well, taking
plastic parts off and cleaning
the extruders and everything.
So it's not the best idea to well
to produce that many of
the print 3-D printers that many
things or.
Yeah, it's.
Well, some.
Well, we, um,
luckily we said some upper limit
on our Kickstarter Kickstarter rewards
and we almost reached a limit and
in the end I would say it was almost
a little bit too high because all these
manual tasks we have had to do,
which are not enough for mass production,
but way too much for two persons
alone, for instance, cable trees, if you
are crimping cables, cutting cables and
whatever soldiering stuff,
it just takes
a lot of time.
We had to deeper steel
rods. Uh, we spent a lot of time
finding a correct still
a good steel supplier who
is delivering already
the correct length of the piece
of the steel.
And, um, well,
in the end, we ended up, um,
hiring two students, helping us,
which was an additional, um,
manufacture in the end.
But without them, we wouldn't have made
it.
Now,
also, the manual
parts were relieved that the
weather problems light, so
eye on the picture,
you see the the the frame parts
of you need four of them for each
kit. We had two and six tickets
and that was after me after
cutting all of those and
before drilling holes into them.
So that was a
good few we can spend.
Uh, yeah.
And also we spent much time.
The effort in the effort for starting
something like that is the first time
effort is really big.
Like you have to find all the suppliers,
go through the Alibaba and
check. Yeah, check the ratings
and that sometimes
they promise you things that
they can't deliver.
Um.
You know, and the drilling was
really bad,
but in the end, we had some fun as well.
First of all, we were invited
to the confidence and effort that
was a small 3D printing fair
was quite nice.
Then some weeks later,
we were invited at the Fab 10
conference of all the Fab Labs in
Barcelona. This was a really nice
experience where we met some,
uh, some people
from the government of Georgia.
They invited us to an innovation
camp in Georgia.
It was some kind of nice holiday
in between the whole Kickstarter
campaign.
We were invited to Tea
and vison at SABL Stiffle.
That's
wow.
It's the TV station of one of the biggest
media companies, the red media, don't
laugh.
We went to the makeup room, which was a
really huge fear.
It was impressive.
And finally, we
got an article in the
Make magazine formerly known as Sirtex,
where we have two journalists sitting in
the front row who wrote the article
and.
We made we made a
little road trip through the US
because we wanted to deliver some of the
parts in our Kickstarter campaign was
based in the US, we
had the great idea that it would be
cheaper to deliver
to not spend the money on the shipping
to the US, but to deliver it ourselves
wasn't.
It didn't work.
And in the US, we made
some very inspiring person,
this guy that's actually
not British, maybe one or another
one knows him.
No.
He founded some nice software company
Origin in the 90s.
OK, you know.
And after all.
Well, it was a
huge experience, um,
I'm really glad that we
have done it, you probably as
well.
It was kind of exhausting as well.
Some some takeaways.
First of all, the cost calculation
advance is super important.
We did our best, but
it was not enough.
But well, compared to other Kickstarter
projects, we have made it somehow
quite good. We are only two
months delayed.
We are around about
00 right now.
So I would I would
recommend if someone was doing
some kind of crowdfunding, think
about scaling before.
Um, even if you are not sure about
if your idea will be a success or
not, just be prepared for
that. Um, yeah.
About the calculate cost calculation on
the our Kickstarter or we heard from
Kickstarter projects or funded projects,
they ran out of money just
at the end, just before they wanted to
ship the rewards.
They didn't have the money to to spend
it on shipping anymore.
So yeah.
I mean um then the 3D
printing it scales
to some point, but at some
point you need at least one
person full time to maintain the
printers.
Um, even though our
printers had some ultra leveling bad
and, uh, quite
timesaving in the calibration,
therefore,
then we underestimated the
duration of of the manual
tasks like crimping cables by cutting
cables and um, additionally,
the direction of finding the right
suppliers. That was a really
big, big, uh,
time time consuming.
Well, uh, then
another advice would be just to think
what do we want to do with the project
afterwards if it's just a project
like we thought in the beginning or, um,
I have you do you have plans to make some
kind of company out of it or to
to make a project opensource or to
get it growing somehow or
something like that? It would have been
good if they've done something like that
before.
And well, we
are rich in experience right now,
but we are not rich
in terms of money.
But we made it and was
was kind of fun.
Thank you both very much for this very
interesting firsthand speech
or talk now, as usual, we have some
questions.
Please line up a few questions.
Well, we have two microphones over here,
two microphones over there.
Please just make a row.
We start with I ask questions.
Sorry, no questions from Rolling Stone.
OK, so we start with number
one, please.
OK, yeah.
Cool project.
Congratulations.
Just wondering
how much effort you put into
actually marketing your campaign once it
was online and
how you went about that.
We didn't put any effort
in marketing our campaign.
We put it online.
It was we reached our goal in
48 hours.
It was mostly the
visitors coming from Kickstarter recently
launched projects.
So we were very lucky at that
point. And
then we thought, OK, we
may do some marketing if
the campaign is slowing down
during the time or during the period.
But in the end, we almost
reached our our upper limit
of devices to produce.
So there was no no necessity
to marketing something.
So we didn't do any marketing.
But we we planned when
to start the campaign.
I don't know. I think I'm not sure if
that helped, but I think
I do think so.
So we we did launch
it in the US when people came home from
work also on a Friday, I think,
and things like that, but no marketing
off of them. OK, well, we published some
things and then on our social networks,
that was it. OK, and what was the limit
on the project?
How many devices did you ship.
Two hundred and forty.
Oh OK. So yes.
Thank you to PS.
My question is, how many emails did you
have to reply to or people you had
correspondence with via email
versus those that actually than.
Participator contributed.
Oh, maybe.
I mean, you have like
three in fifty 60 backers,
I would say five to six
times that five, six times.
Yeah, yeah. That was like.
Number number four, please.
Yeah, in the first place, many thanks for
this awesome, awesome story.
Uh, one question
in the last slide, you advised
to think before, uh,
about what you want to do if this is only
a project or you want to take steps
further. And then you mentioned that
you in the first place thought only
of it as a project, but you said
in the first place. So, yeah.
What is the next step for you
guys?
Well, the next step is to grow the
company. We have a company right now.
We try to
get venture capital.
We hats after the Kickstarter campaign,
we had two to three requests per day
for a device.
We couldn't deliver that.
So we thought, OK, let's just
try out what is going on then,
OK? And but, you know,
thought of where
where this is going to end, where you
want to end.
For me, it was like, yeah, let's do
the Kickstarter and then I would I
plan on going back to my normal work
like that. Yeah, that was that was
the problem.
Thank you.
Thank you. Number one, please.
Oh, I was wondering
why you chose Kickstarter over
some other crowdfunding servers
and why only Kickstarter
and some like three
crowdfunding services?
OK, well, we have
chosen Kickstarter because it's just a
market leader. It is huge.
Um, we had the chance because
my brother lives in the US, otherwise
he would have probably been using
Indiegogo.
Um.
But we just read the 2013
numbers from Kickstarter, they had some
slides that were very impressive and so
we thought, OK, Kickstarter, what would
it be?
Well, to make some crowdfunding
parallel on platforms.
I think it's a huge effort.
And it was already too much on
Kickstarter the first week.
So I'm not sure if it's a
good idea if you don't have a
big team behind you.
Thanks.
Thank you. Number two, please, could you
say a few words about the legal side
of things? So you did that as a private
person, not as a company.
What about regulations and
liabilities?
You might run into someone
bernz is I out of it and
wants to sue you with it?
Or the FCC tells you that this is not
regulated or whatever.
So could you just say a few words
about people interested
in producing HeartWare, what they have to
pay attention to?
Or perhaps they don't have to?
So we do have a company
because of the liability issues.
We did do that.
And well,
we did we did the project
as a as a DIY
kit like that
DERMAN, which
shifts the liability to the
person or some
part of the liability to the person
assembling the kit.
That was.
And also it
takes away the requirement to to
comply to all the regulations like
sea or waste,
electronic waste and everything.
So you founded the company before you
ran the Kickstarter.
So which legal form you choose to do
that? An LLC limited
liability company.
You can do that via an online
service within an hour.
OK, thank
you. Thank you.
Number one, please.
OK, I've got another question, if you'll
permit me.
Now, do you feel like you've got a sort
of community of users, the
kind of audience through which
you might try and launch similar products
in the future? Or do you see it kind of
as being the end of this project and then
you start a different kind of venture?
We are right now trying to build a
community around our midstream project,
um, we have some quiet, very
active, uh, members
in the community
and that was the reason why we wanted to
do it as open source so people can like
we can continue
or we can decide on if we want to
continue it or not, and or and people can
just work on
their own on it and extend it.
Uh, yeah. We really want people to to
to work with it and do.
Yeah.
Improve it or develop attachments
or um I don't know,
uh the work.
Did you approve it.
Yeah. So did you learn anything from
your um from your backers kind
of. During the campaign did you hear
about any feature requests or
tweaks like what color you painted or
stretch goals or anything like that.
Yes, a lot.
Yeah.
Yeah. You have to um
somehow you have to just block it
and others are
quite nice ideas, so you have
somehow to manage it.
You'll also learn a lot about use cases,
people who want to use what they want
to use it for and
yeah, sorry,
so sorry to interrupt, but meet you out
there. Yeah.
So there's enough time outside to meet
this guy. So a lot
of applause for this very good speech.