Two’s Company, but what we need is a Crowd

My next observation after attending EELive this year.

Crowd source funding is popular. Maybe it was just the choices I made in personalizing my conference schedule but it appears I need to add Kickstarter to my bookmarks right along side my favorites of Google, Expedia, Amazon and Wikipedia. I wonder if I can get as good at using it as I have the others.

Trendy marketing really does make the difference. With Kickstarter you start with a product message, an entertaining, visionary and maybe informative video (not too much because vagueness creates mystery) and a prototype (maybe just a mockup, video special effects makes it look like a prototype). Marketing now precedes product development and with marketing you can convince many to risk a little instead of trying to land one big investor who probably wants to see a history of income growth and a 2 dimensional product roadmap before writing the check. A Kickstarter investor is a bit like high tech QVC shopper. He watches the video and hits the buy now button. Except, no sales representatives need to be standing by and no inventory needs to be sitting in a warehouse.

There is more technology and ideas than products. Every where I look I saw open source hardware, open source software, cheap and free and easily hooked to the internet. Websites that advertise hundreds of project ideas, development platforms and cloud services. All in search of a product. Or are they in search of a profit? I don’t know. The product seems to be the development platform and the consumer is the developer. Case in point: This company initially tried a Kickstarter campaign for a WiFi connected light bulb socket adapter that used a cloud service to connect your lightbulbs to a phone application. They wanted more than 4000 people to sign up to buy these at $59 each and surprisingly may have actually got about half that. Apparently, though, for the other 2000 people they needed, $2000 is more than they were willing  to pay to control all of the lights in their average US home from their cell phone.

With that campaign expired without full funding, the company took the WiFi guts out of their product and campaigned again on Kickstarter with just a WiFi development board at $39.  They already had the design and manufacturing of these boards figured out. In fact so does Texas Instruments, MicroChip, Atmel and several module companies. But they have a cool video and they do open source everything and that is attractive. So even though they only asked for a few hundred backers. They got over 5,000. So, the lesson is, you can’t get 2000 people to buy your internet of things (IoT) product but you can get 5000 people to try to do it better.

And another lesson may be sell the hardware cheap, give away the software and get people to develop lots of products that depend on your free cloud service. Which is free just like Netflix streaming and Logmein was.

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