How crowd-first disrupts GTM tactics
Based in Boston, MA, father and son Dave and Calvin Laituri, co-founders of Onehundred have over the course of three years created something of a local crowdfunding revolution. With ten successful campaigns and a 100% success rate under the belt, Onehundred is one of the companies that we from time to time put under the loupe—not because of excessive funding volumes, but because their approach to crowdfunding disrupts how startups and SMEs think R&D and go-to-market (GTM).
Crowd AssetsLaunching Pucs, the first campaign under the Onehundred brand, left the company cash-positive and debt-free by noon. Dave Laituri has been kind enough to share their crowd-first experiences with launching campaigns, building up crowd assets, and rethinking R&D when you have a small team and a huge crowd.
Let’s start out with a couple of stats to show the true value of having an engaged crowd.
- Onehundred sends out 2-3 emails to announce an upcoming campaign launch
- Emails are send out 48-72 hours before launch
- The company does not advertise
- All traffic to their campaign sites stem from email campaigns; their crowd’s social sharing; and organic search
- Their crowd grows with 20% for each campaign
- 20% of year-one sales stem from crowdfunding
Let that sink in for a moment… No advertising budget; 48-72 hours from prototype to campaign launch; and a 100% success rate! By nurturing and engaging with their crowd, Onehundred has managed to de-risk their GTM completely, and without spending a dime on advertising.
Onehundred’s latest campaign is no exception. Launched in early April, the Kiki campaign got the crowd’s stamp of approval in less than 20 minutes!
Then and Now
“When I launched my first campaign (1Q, ed.), crowdfunding was still a fairly new phenomenon” says Dave, “Back then bloggers, reporters, and the like would jump on most campaigns that stood out in some way. I guess our focus on top quality materials and local vendors resonated… we were even invited to the Disrupt Conference back then.”
This is when the idea of building a company around repeated crowdfunding awoke. “It was a great way of building on the first success and teaching Calvin (then 13 years old, ed.) about building businesses—a modern lemonade stand of sorts,” Dave smiles through the phone.
The most important learning point on this journey has been the immediate feedback and continued communication with the end users. Dave has years of experience with industrial design and product development at companies such as General Motors, HP, Apple, Brookstone, etc., and “… it was never really clear to me what end user thought about the products and designs that I was involved with.”
He continues, “It feels like the customers you get via crowdfunding campaigns expect you to be ready for feedback, which on the one hand can be challenging if your organization isn’t prepared for it, but on the other hand, if you are prepared and you do listen… you end up with a product line that meets customer needs perfectly.”
Here Dave echoes a point made by almost every company that runs crowdfunding campaigns: IT IS NOT A LISTING SERVICE! When you take product ideas onto a platform like Kickstarter, you are engaging in social networking. There is a very clear link between the money you raise and your commitment to communicate and engage with the audience. To Dave’s point, this is a challenge as well as an opportunity that you need to be prepared for.
Onehundred’s campaigns set very low funding goals. “We have sufficient data by now to understand how much we’ll sell after the campaign ends, so if we end up with a campaign that barely makes it, we can still deliver and at least break-even,” Dave says. This is a point that we have discussed at length in “Crowdfunding Goals” and “Startups and Crowd-First Tactics”. Onehundred is here using the minimum-run method for setting funding goals.
Crowd Engagement / Guidelines
To summarize; Onehundred’s success is solely driven by their ability to get thousands of people engaged with their product ideas as well as their mission. This is possible for them because they Build, Grow, and Nurture crowd engagement.
Having followed the crowdfunding space for some years now, it is astonishing that some campaigners think that all you’ve got to do is ask! The idea that you can crowdfund anything without having an engaged audience ready once you push “LAUNCH” is puzzling to say it the least. In Onehundred’s case, a crowd of thousands of engaged customers (and fans) have built up during the years. The company puts very little emphasis on social media, spends nothing on advertising, and relies solely on emails for campaign announcements. This can only work when recipients are committed to and interested in the company.
The secret sauce in this case has been a continued effort to nurture engagement. The majority of campaigns that Dave Laituri has been a part of has in one way or another pivoted on the initial idea based on customer feedback. When thinking of each campaign as a startup in itself, this openness falls naturally within the frameworks of the Lean Startup as well as the minimum viable product approach for software development. Following Dave and Calvin’s example, any company that ventures into crowdfunding has an opportunity to build up engaged audiences by following the same principles.
Need a unicorn valuation before your next product release? If so, crowd-first is not for you. Building up a crowd that actually cares about your company takes time, and the benefits materialize gradually. Crowd engagement builds up when your company continues to be relevant.
Onehundred’s emphasis on local vendor economy positions the company as a creative hub between manufacturers in a 100 miles radius of the offices in Boston, and (literally) the rest of the world is a project with which their crowd wants to engage. It should be a lesson for anyone running a crowdfunding campaign, so before you hit “LAUNCH”, ask yourself…
Do you have sufficient traction/attention to launch a campaign?
How can the crowd you have built up so far benefit your company in the future?
Which changes do you need to make (in your organization, routines, etc.) to leverage the full strength of your crowd?
You can find Onehundred’s Kiki campaign here.