Brad Leong and Sam Gordon have a 3-0 record for crowdfunding projects, something they’ve done by bringing an app store-like model to platforms like Kickstarter that could herald a new way of launching a multi-product hardware startup.
The pair have raised $1,054,666 since June 2011 crowdsourcing their Oona iPhone stand, Brydge keyboard and iPhone ReadyCase. It’s especially impressive considering Kickstarter has a success rate of 43.74 percent. Leong and Gordon have found a consistent formula for financing multiple products and an entire business. The crowdfunding sites have essentially made it possible for them to take their multiple hardware ideas and put them in front of potential buyers to get immediate feedback and predict (and fuel) their success, much like app developers do.
“It’s a study in how an ‘app store’ ports to hardware as a company that has ‘apps’ in a marketplace,” Nick Pinkston, who started the SF Hardware Startup Meetup, said.
It’s a unique approach that few other entrepreneurs and tinkerers seem to be doing. The vast majority of Kickstarter campaigns are one-off projects. But considering the minimal venture capital and limited retail routes in the hardware space, it’s a very smart model. Still, Leong and Gordon can’t use Kickstarter indefinitely, and don’t want to.
“The goal is not to do Kickstarter projects forever,” Gordon says. “The goal is to have the products start us off, build capital, and really start a products company off of that. It’s been a good way to kick-start our business, some might say.”
The duo hoped to achieve serial success to build their business, named Brydge for their most successful campaign. Most of the money they’ve raised has gone back into producing product. The duo’s new warehouse is incredibly sparse, with only a few long tables. On the day I visited, they had some friends helping pack a shipment of Brydge keyboards. Such is the glamour of a startup. Both Gordon and Leong live with their parents.
Yet with Leong’s hoodie and Gordon’s Silicon Valley flair — sandals with jeans and a button-down shirt — the two look like the quintessential young entrepreneurs. Surprisingly, neither of them has an engineering degree. Gordon knows communications and PR, while Leong comes from a film background. They met in a college leadership class in 2006 at the University of Southern California, and have been bouncing ideas off each other since.
“What I like to do is tinker and make physical things. That was just the realm we went into because of that,” Leong says. “I think we’ve always known that we were going to do something entrepreneurial…. We didn’t really socially talk. We never called and said, ‘How’s it going?’ It would just be, ‘I have this idea, let’s talk about it.’”
Kickstarter was the perfect testbed. After seeing the Lunatik iPod mini watch kit blow up on the site, they decided to try it out.
Leong’s and Gordon’s excitement while talking about their first project, the Oona iPhone stand, is palpable. They didn’t expect much, and their goal was a modest $10,000.
“It was the first week we met our goal,” Gordon said. “But then it really took off. This was crazy. We realized it could be a full-time real thing we could do.”
The Oona iPhone stand, which raised $131,220, taught them a lot about the manufacturing and production process — something many people with Kickstarter hardware projects struggle through after getting funded. For example, the Pebble smartwatch was slated to ship in September, but is now three months late.
“Seventy-five percent of Kickstarter projects are significantly late,” Leong says. Wharton School of Business professor Ethan Mollick found that only 25 percent of projects deliver by their estimated delivery date. The slow turnaround is why alternatives like Christie Street have launched to ensure that backers don’t end up losing money on a product. Kickstarter itself has been very straightforward, however, in saying that it is not a store, though many hardware products use the rewards system like a pre-ordering platform.
You might argue that Kickstarter is meant to finance a project, not a company. But Kickstarter doesn’t seem to have a problem with people running multiple campaigns to, er, kick-start their business.
“Millions of people have come to Kickstarter to cultivate a more vibrant and verdant creator culture that values the creative process as much as the end result,” a Kickstarter spokesman told Wired in an e-mail. “We’ll continue to be home to imaginative ideas from all corners of the creative universe.”
Vague, yes, but Brydge isn’t the first to go down this road. Studio Neat has funded both of its products, the Glif and the Cosmonaut, on Kickstarter.
Gordon points out that one of the most challenging part of a Kickstarter campaign is not raising funds, but figuring out what to do afterward. The logistics of producing and shipping something, especially if you’re working in China, is incredibly difficult. Many of the people posting to Kickstarter, particularly makers and tinkerers, are not familiar with the process.
“If you look at a lot of Kickstarter projects, they’ve made one and they know how to make one, but then they have no idea the process of having to make thousands,” Gordon said. Multiple campaigns has helped them hone those skills.
The Brydge keyboard, a sleek aluminum rig that turns your iPad into a MacBook Air look-a-like, has been the duo’s most popular campaign, raising $797,979 — nearly nine times their goal. They’ve taken more than 5,000 orders. It was a tricky enough piece of hardware that they had to go back to Kickstarter after Oona.
“It has a whole bunch of little pieces in it and since it’s a higher price point product it means it’s a much larger initial investment to get it up and going,” Leong said. “Oona was successful but it was not so successful that it could fund Brydge.”
ReadyCase, their most recent project, has raised $125,467. It’s more of a side project, and it got started on Kickstarter competitor Indiegogo.
“Kickstarter has a policy of no knives on their site,” Leong said. “It’s a little fine print thing and because ReadyCase has a small multitool knife blade, they would not allow it.”
Aside from raising capital, one of the best reasons to keep going back to Kickstarter is it provides immediate feedback. Bad ideas won’t go far. If people hadn’t backed Brydge, the guys would have known it was a dog and dropped it.
With three successful projects in the bag, Leong and Gordon have some tips for Kickstarting a project. First and foremost, be innovative. Nobody wants something they’ve seen before, so don’t reinvent the wheel or offer some incremental improvement of your own gadget. Remember that you’re selling yourself along with your project, so express who you are. And if you plan on having multiple projects, don’t go nuts with your first one — start simple, get the manufacturing down, and then move on to something a little more complex. And whatever you do, don’t wear out your welcome.
“The thing that’s bad on Kickstarter is these companies using it just to promote,” Leong says. “That’s completely against the idea of what Kickstarter is. If we have the means to make the product, then we’ll make the product. We’re not going to sneak it in there. People say, ‘Oh it’s new because we slightly tweaked something,’ but it’s really a product they’ve been selling for five or ten years. We don’t want to do that.”
“We believe in the spirit of Kickstarter, which is to help people to make something that couldn’t be made without it,” Gordon said. “It sucks to sometimes see products that don’t do that.”