Yesterday we attended Techweek’s panel on “How Small Businesses Are Generating New Customers, Buzz and Money Online,” with our very own Phil Tadros who joined Adam Chapnick from LA-based crowdfunding bastion, Indiegogo; Matt Johnson, an entrepreneur who launched a successful Indiegogo campaign; and Matt Matros, the founder of health-conscious Protein Bar, who uses technology to connect with his customers.
Here are the highlights of the conversation.
How important is buzz for the brand? Is it as important as sales and conversion?
Matt Matros: “There’s buzz that you generate on your own, whether it’s submitting a tweet or something that comes from you and then there’s buzz that comes from the broader community and customer base. Our best form of buzz is our lines outside our doors at lunch time, people walk by it, they see it, they want to be a part of that, so this creates sort of a bandwagon effect, it makes people feel more comfortable about their purchase decision. You can see that several hundred people are also making that choice it mitigates the sort of buyer’s remorse for them. … you want to feel good about your purchase decision and that it’s validated by others.”
How long should you give yourself to convince people that you have something amazing?
Matt Matros: “When we first opened Protein Bar we just sold protein shakes, it was more of a Jamba Juice competitor and we did 200 customers a day and I was having trouble paying the rent. So I looked and saw that people in the Loop were only leaving their office once a day to get lunch, they’re not leaving to get a shake so then I thought … ‘I need to sell lunch,’ and ‘what do I do to differentiate my products so they will come and get it verses someone else?’”
We did this by being nutritionally relevant. For me I just found out what was important to my customers, what do my customers want. Customers are everything you do should be about satisfying and solving needs for your customers. And then doing that several hundred or thousand times.”
Phil Tadros: “You have to pivot and figure out where you’re at … a lot of times, when you fail it’s awesome because it allows you to feel like, ‘Alright, where do I go now?’ A lot of successes come out of what you think at the time is a failure. You have to be open to adjust.”
Matt Matros: “It’s arrogant to think that customers will change their behaviors and go to you. You have to go to where they are. … Starbucks opened stores across the street from one another because customers don’t go out of their way to go to a Starbucks from the train to the office.”
What are the benefits of crowdfunding with platforms like Indiegogo, beyond money?
Matt Johnson: “Crowdfunding goes well beyond just money, it’s a great way to just test an idea and see if it has enough traction. When you have a business and you ask, ‘do I have a viable idea?’ Well let’s just put it out in the community and reach out to the different markets that would care about what your idea is.”
Phil Tadros: “For me, If I may not have a dollar in my pocket but want a project to work, I’ll talk about it and be into it; it’ll start sparking the idea with other people and then they get into it because they are excited about it, and they see it growing.”
Adam Chapnick: “That’s definitely the core of crowdfunding just to throw that in. If you’re passionate and have a great idea and know what you need and want to connect with people, you can use crowdfunding—that’s what it’s built to do.”
“You will create all these advocates that have funded you and when you’re ready to come to market with something, you have this core evangelist team that have paid you for the privilege of being your marketing team.”
What Crowdfunding isn’t
Adam Chapnick: “There are no elves to do the work for you while you sleep, you can’t put up a crowdfunding site up, go to sleep and then ‘yay, the elves did all the work.’
What crowdfunding isn’t is a collection of strangers sitting on a site with money in hand waiting for you to show up and give it to you. What most crowdfunding sites are, are implements that maximize your ability to reach through to your first community … A lot of campaigns are 75 percent funded by strangers.”
When do strangers start giving you money on Indiegogo?
Adam Chapnick: “There’s a key stat that says strangers won’t contribute to a campaign until about 25 – 30 percent of your threshold, regardless of the size of the goal, is met. So if you have a $1000 goal, $300 would have to happen before strangers jump in. so know that when you set your goal, you may still want half-a-million dollars, but if the community can only support $10,000 make your goal no more than $30,000.”
And then the second thing is: make sure you get everyone knowing that stat in advance of launching the campaign… you want that threshold on that first day.”