Wednesday, June 17, 2015

Follow Up On Kickstarter Start-up

Last Sunday I reproduced a conversation with a past seminar participant, and it continues:

On Jun 14, 2015, at 5:07 AM, BN wrote:
***...What you describe next skips that critical step. Based on what solution to what problem?  And what criteria?***
Watchmaking is not about time keeping as much as it is about beautiful things, well made, by people with past down skill, watchmaking is an endless task. It doesn't matter if you're a huge brand or a small entrepreneur, we all have dreams and hopes and we're entitled to have them. We have the ability to improve and to perfect. Nothing is perfect.. When you buy my watch you'll buy into that. That's the first selling point.

***Right up there with Patek Phillipe etc, I like it.***
The second selling point is the design. New business means innovation but it's also finding that perfect balance and harmony between old and new.

***Which also constitutes innovation.  #1 complaint from past participants "new product is so much easier than you say...."  Well, I say it in the book, i say it in the class, i say it in the blog...  but no one hears it, until they do it... just about everyone overdoes it...  learn from apple... they do almost nothing iteration from iteration...***

For as long as human history people have craved expressions of the world around them that mirror the time and place they live in. Surrounding influences form the publics perceptions of what they think are aestethically pleasing,  the social the cultural. technical aspects etc all form part of our designs. Hence, I think you are right, as entrepreneurs we must serve to define what these common perceptions are by asking the customers what they want. But my question is: does an artist always ask permission?

***Yes, artists always ask permission...  once they sell something they tend to replicate that which sold the last painting... any art history course will tell you that...  Michelangelo  had to do-over the Sistine chapel for getting it wrong, but he was a sculptor, not a painter, so he can be forgiven, painting wasn't his thing.***
An artist is not a business man but without the work of the artist the businessman doesnt have anything to sell.
***Well, every artist I met is all about the money.... but yes, you have the design component estimate right...  who will you have design your watch...  The beatles had George martin design their early music, and Eric Clapton had Phil Collins move his sound into the 1980s.  Who is your designer?***   
I believe that design is not about conditioning oneself to what the public wants. The public doens't know what they want before you show it to them. Nor is design about innovation for innovations sake. It doesnt always have to solve a tangible problem and it's not about the more daring or innovative ideas you have. It's about striking that perfect balance between a number of elements. The human psyche plays a major part in our choices as consumers. I believe I can tap into that.
I do a tremendous amount of research online and through magazines,
***Which demonstrate passion...***
I speak to the owners of watch boutiques
***the only research that matters...***
and I find inspiration from all parts of my life. I have a picture of the watch in my head, its still somewhat unclear. I've sketched it out on paper and it's not perfect. I feel that there i something missing but I know it has the potential of becoming an icon once its finished.
***Perfection is the enemy of the good.  Look at the first apple computer. 
Jobs would still be tinkering in his garage if he waited for perfection.  You can start at a higher level since there are components for your idea in place where there were none for Jobs.  You'll both start with what is at hand.*** 
***Well, in business the customer is the most important thing, and design is the hardest thing.  Without customer input, getting the design right is unlikely.***
Well, I suppose I should find out who will be my customer but how can I do that when I don't have a product sample?
***By trying to buy your idea when you visit those watch shops.  Get to where they say it is a good idea and does not exist.  The reason Rolex and Patek introduce new watches every so often is boutiques desperately need new.  They need it from you or Patek, they don't care.***
How should I get feedback from the customer at this point? All I have are some very rought sketches in a note pad. How about I show these sketches to a group of end-consumers that own similar watches and check their reaction?
***No, work from ideas, and let them sketch anything they think is critical...  handwritten sketches from an upscale store owner explaining an innovation is gold as you proceed through designers and makers to prototypes, which in time you will bring back to those pipers to show them the tune they called.***
Perhaps I could get the contact details somehow of customers who've bought similar watches
***Your customers are the retailers not the end users....***
and do a Galupp poll or use focus groups. Seems costly and time consuming though...
***To much money for too much info that you do not need nor can apply...***
tips would be appreciated how I can test my design cheap, fast and realiably to make it worthwhile.
*** Form a hypothesis as to what is missing, test the hypothesis with the customers you expect to buy form you (by trying to buy it from them) and then return with that which they proclaimed a good idea but does not exist.**
I think a brand name must be short. It should be possible to easily pronounce in whatever language or culture. Now if I told you the name of some chinese fellow who created awatch you'll wouldn't remember it (unless you're fluent in Chinese). Did you know that the most well recognized brand in China is LV. Easy to remember and everyone can pronounce two it.... Problem is I've seen another watch company that uses the same abbreviation and I don't want to infringe on their name. Naming a company nowadays is a real problem....... How about making up a name completely? A word that doesn't even exist and then creating values around that?
***Mercedes Benz, Patek Philippe, True Religion are also extremely well known in China...  you are waaaay too hung up on a name...  Calvin Klein, Tiger Woods, Your Name.  Done.***
Problem with B2B is that they'll buy minimum order and they'll want marketing material, point of sale merchandise.
*** Sure they want it, all buyers want it, but ultimately they want new.  Tell them no, the word buyers most love to hear, for until they get a no, they cannot make a decision.  Say your watch is $5000 wholesale.  All retailers have an advertising budget.  Tell them you offer a 10% ad allowance if they mention your product by name in their ads.  They jump on that, which costs you nothing out of pocket, except for one ad slick, which you can get done for $200 world class production.  This is al in my book.***
Kickstarter is all digital. If they don't sell the merchandise they might even want to ship it back to you. On crowdfunding platforms such as kickstarter you know the suppliers minimum order and the whole idea is to get enough purchases to cover than initial production run. If you can't succeed at that you've lost the time and the money you've spent developing the prototype and the video. If I succeed at Kickstarter I should have great leverage with retailers and suppliers.
***Right...  but unknown:  how will top boutiques view a product that is kickstarter  generated (I don't know.)  Also, again, why only kickstarter, why not parallel both processes, so if kickstarter fails (I believe most do, you should check that...) you can keep going with the old school process.  (and again, kickstarter is nothing new, just digital.)*** 
I would think the customer acquisition cost would be far less online. Please tell me if I'm misguided and why since I can't afford to make costly mistakes. Should I look for B2B underwritings instead?
***That is the great delusion, "customer acquisition cost is far less on line..."  it is more like 20 times higher online that in brick and mortar.  This is another reason what 1. Even amazon makes not money with online sales, 2. why online b2c is stuck at 6%, less than mail order catalogs in the 1980s.  I've demonstrated this repeatedly in my blog posts...***

By following the plan you outline, it is do or die as you say above.  My guess is likely die.  On the other hand, sticking with Plan A, and running a kickstarter after the fact, if Kickstarter does not pan out, you still have a viable item to pursue.
If say I needed 1000 sales to make the first production run and I only reached 800 I might look at ways to improve the design and make another run at it. But if I failed completely I would not pursue the idea since something would be very wrong in my judgement.
***done right, 98% of your watch is off the shelf components, with 2% new.  Your minimum might be 100 watches, or even 20 if they are in the $5000 range. 
There is absolutely nothing new about kickstarter, throughout history, in times of peace and prosperity, private projects were funded by subscription (underwriting, literally writing the names of backers under a description of the project.) Kickstarter has changed nothing.  use it the way it as intended, and maybe it might help, but don't depend on it or organize around ti...
Agreed! Kickstarter is not where I intend to do business. Kickstarter will help me get the first production run, be able to show retailers and suppliers that there is a demand for my product, nothing more.

I will make it mandatory to give feedback if you buy my watch through a crowdfunding platform and there will be rewards for whoever gives the best feedback. Hopefully with thousands of comments on my watch design I'll be able to perfect.
** I dare say that the kickstarter idea has spurred forward movement, but I am afraid in the wrong direction...  you do not need money, you need customers... but anyway, kickstarter will not let you do your idea of "help design" with kickstarter feedback...  also, again end-users are not your customers... the boutique watch shops are...***
more coming occasionally...
Feel free to forward this by email to three of your friends.


Anonymous said...

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Russia looks to replace western loans with Islamic finance loans:

Luke Avedon said...

"I would think the customer acquisition cost would be far less online. Please tell me if I'm misguided and why since I can't afford to make costly mistakes."

How much are these fellows watches? Are there any B2C businesses that make money on the front end?

Anyone, I've ever met in direct marketing looses massive amounts of money to get a customer. B2B you only spend your labor to ask someone and they give you a check. Since you are actually talking to a human if they don't buy they tell you why.

Why anyone would want to tumble in the B2C hell realm baffles me.

If this fellow tries to market direct I wonder how much it would cost to get a customer, even $500 seems low.

A friend of mine, who I took your food class with, does direct marketing online media buying. The costs are always shocking--even to him who has been in the business for many years. They just keep going up and up.

John Wiley Spiers said...

I'd love guest blog posts from a fellow who markets online and finds cost of acquisiion just rising, esp. "how come"

Now as to:

"Why anyone would want to tumble in the B2C hell realm baffles me."

B2C is shorthand for retail, and retailers are we wholesalers life blood. They love their work, it is matter of division of labor, and the nature of retailing that draws them. hell for you and me, heaven for them.

The brick & mortar retailers who employ online well use it simply as self-service check-out.

Love the retailers!

Luke Avedon said...

Yes, very true. I guess it's a matter of perspective. I recently read Sam Walton's book, he was certainly wildly passionate about retail.