EP 64 - Shirley Tan - How to Use a Crowdfunding Campaign to Launch Your Business
|Awesomers Origin - We'll talk to an Awesomer about where they came from, the triumphs and tribulations they have faced and how they are doing today. An Awesomer Origin story is the chance to hear the backstory about the journey our guest took on their road to become awesomer. These stories are incredibly varied and the takeaway is that awesomers come in all shapes, sizes, backgrounds, creeds, colors and every other variation possible. On your awesomer road you will face adversity. That’s just part of life. The question as always is how YOU choose to deal with it.|
Shirley Tan is the inventor of Posture Keeper, she is also the author of Ecom Hell, Founder of The Systems Coach and the original Founder of AmericanBridal.com which was sold to The Knot, number 1 wedding portal in the world. She also worked at Yahoo as Director of Product and part of the Growth Team.
Ms. Tan, an early e-commerce pioneer, has more than 20 years of experience as a retail/wholesale and e-commerce executive. She consulted with small to midsize companies, working to optimize their business processes for sustainability, profitability and salability. Ms. Tan helps her business clients operate like large companies, using proven processes and systems to grow and often prepare them for sale.
Currently, consultancy is on pause while Ms. Tan pursues bringing to market, her new invention Posture Keeper, a lumbar support systems that help user improve their posture, reduce back pain and stops people from leaning forward which causes numerous health issues.
How to Use a Crowdfunding Campaign to Launch Your Business
Crowdfunding can be an extraordinarily powerful part of your marketing launch for a new product.
On today’s podcast Steve Simonson introduces Shirley Tan, the inventor of the Posture Keeper. She's also the author of Ecom Hell, founder of the Systems Coach and the original founder of AmericanBride.com. She also worked at Yahoo as a Director of Product and part of the growth team. Here are more amazing takeaways on today’s episode:
How Shirley invented the Posture Keeper.
What crowdfunding is all about and how to set up a campaign.
The top crowdfunding platforms: Kickstarter and IndieGoGo.
So listen to today’s episode and know more about creating a successful crowdfunding campaign for your next product launch.
01:38 (Steve introduces today’s guest, Shirley Tan.)
03:19 (Steve asks Shirley about her background.)
07:39 (Shirley talks about her origin story.)
32:11 (Shirley talks about Kickstarter and IndieGoGo.)
56:10 (Shirley’s prediction about the future of Posture Keeper.)
58:37 (Shirley’s final words of wisdom.)
Welcome to the Awesomers.com podcast. If you love to learn and if you're motivated to expand your mind and heck if you desire to break through those traditional paradigms and find your own version of success, you are in the right place. Awesomers around the world are on a journey to improve their lives and the lives of those around them. We believe in paying it forward and we fundamentally try to live up to the great Zig Ziglar quote where he said, "You can have everything in your life you want if you help enough other people get what they want." It doesn't matter where you came from. It only matters where you're going. My name is Steve Simonson and I hope that you will join me on this Awesomer journey.
If you're launching a new product manufactured in China, you will need professional high-resolution Amazon ready photographs. Because Symo Global has a team of professionals in China, you will oftentimes receive your listing photographs before your product even leaves the country. This streamlined process will save you the time money and energy needed to concentrate on marketing and other creative content strategies before your item is in stock and ready for sale. Visit SymoGlobal.com to learn more. Because a picture should be worth one thousand keywords. You're listening to the Awesomers podcast.
01:38 (Steve introduces today’s guest, Shirley Tan.)
Steve: You are listening to episode number 64 of the Awesomers.com podcast series. And we have a tradition, all you have to do is go to Awesomers.com/64, to figure out all the show notes and details and see all the things that we put together for each episode. It's really quite a bit of work and quite a bit of effort, so we hope that you get on over there and check that out right now. Today's episode features Shirley Tan. Now, Shirley is the inventor of the Posture Keeper. She's also the author of Ecom Hell, founder of the Systems Coach and the original founder of AmericanBride.com, which was eventually sold to The Knot which is the number one wedding portal site in the world. She also worked at Yahoo as a director of product and part of the growth team, that's a lot of experience. As an early E-commerce pioneer with more than 20 years of experience as a retail and wholesale and even E-commerce executive, Shirley has consulted with small and mid-sized companies, working to optimize their business processes for sustainability, profitability and saleability, that's the ability to sell you. And once you have all of those abilities then you have scalability. Shirley helps business clients operate like large companies using proven processes and systems to grow, and then prepare them for that eventual exit or sale. Currently, consultancy is on pause while Shirley pursues bringing this new product, her invention, Posture Keeper to the market. This is a lumbar support system that helps the user improve their posture, reduce back pain and stops people from leaning forward which causes all kinds of health issues. We're talking about crowdfunding, we're talking about inventions, we're talking about some exciting stuff today, and I'm thrilled that you're here with me today I can't wait to get into today's episode so let's get you on up right now. Hey, Awesomers it's me Steve Simonson and we're back again on the Awesomers.com podcast. And today, I have a very special guest, Shirley Tan. Shirley how are you?
03:19 (Steve asks Shirley about her background.)
Shirley: Hi Steve, how are you? Thank you for having me.
Steve: Thank you for joining, and as the Awesomers have grown accustomed to we need to do the math if I got your name right, I pronounce everything right?
Shirley: Shirley Tan. Yes!
Steve: I've had a couple relatively soft ball pitches that come to me, and I'm happy about it because I've been getting a lot of names wrong. So I'm thrilled that I've got another one in the win column. Luckily for me. Now I've already read in your bio and so the audience already has a top level view of who you are. But maybe in your own words, you can kind of tell us where you live and what you're doing day to day.
Shirley: So I live in San Francisco, the beautiful San Francisco in California. And what do I do day to day, so right now I'm in the middle of my Kickstarter launch, and it's actually a Kickstarter campaign. And we're 14 days to go we're nearly just sliding over 38,000, so I'm still excited, I'm still hopeful, like everyday things have to go on, right? And so I'm also sitting here and I've been looking forward to our podcast interview.
Steve: Well good, and I want to say kudos, congratulations to you, because as I recall you set that number relatively small and you were able to achieve your number like in the first couple days.
Shirley: Yes, we were able to, our campaign goal was ten thousand. And that's all I really needed to have the factory start production. So I said okay, that's what the factory said that's what we'll do. And we achieved it in 18 hours actually, so I was like wow! that’s so exciting, I'm so just grateful that the community responded and people are saying “We could like this product” that's what it tells me.
Steve: I love it! That's great stuff. We're going to dive more into the concepts of a Kickstarter and yours in particular. Although the pre-work, a lot of people think that's I just put up a photo on a video and click a few buttons and that's my crowdfunding but that's not really how it is.
Shirley: Oh no.
Steve: I can see the pain in your eyes.
Shirley: That’s why I talk about that, just reach out to me, if I talked you out of it you probably should pay me, because of all the grief that I’ll save you.
Steve: That's true. That’s quite right.
Shirley: But you still wanted to do it, there's all these things as well that you should be aware of. And by no means am I an expert just so many people before me, I stand on the shoulder of these giants. And I've read a lot, follow instructions, a lot of research but it's podcasts like this that helps. I did a lot of podcast research to listen, like what am i jumping into and so I think people like you who run these podcasts are so amazing. I don't know how you guys do it. You guys are just amazing.
Steve: That's very kind of you. Yes, I don't know how I do it timewise, luckily guests like you are doing all the heavy lifting. And I know that the audience will want to hear some of the lessons learned so fresh in your mind because you already accomplished your goal but it's still ongoing as we're speaking today. So it's going be really great. We're going to do talk about crowdfunding we're talking about your lessons learned and we're going to talk about your origin story but we're going to do that right when we come back after this break and we'll be right back.
Catalyst88 was developed to help entrepreneurs achieve their short and long term goals in e-commerce markets by utilizing the power of shared entrepreneurial wisdom. Entrepreneurship is nothing if not lessons to be learned; learn from others, learn from us. I guarantee that we will learn from you. Visit catalyst88.com because your success is our success. Hey, giddy up. You're listening to the Awesomers podcast.
Steve: Everybody we're back again, it's Steve Simonson joined by Shirley Tan. And today we are talking a little bit about Shirley's origin story and where she came from, and that's going to be interesting and engaging and then we're going to branch into her experience with crowdfunding and how that went down and some of the lessons learned. I'm sure is it fair to say Shirley there's some painful lessons learned along the way?
07:39 (Shirley talks about her origin story.)
Shirley: Painful lessons, that's what that is right? There's also joy as well when you accomplish your goals and people that came with you along that journey, the friendships that you make right? So those are good things.
Steve: That's true. Well you know even in the workout space they say, no pain no gain. So we should just expect that it's part of the journey anyway. So you mentioned earlier you're living in San Francisco, but where were you born?
Shirley: Actually I was born in the Philippines. Tan is a very famous last name. Like where everywhere. There's a lot of Shirley Tan’s but you won't find me.
Steve: Now how about your parents what did they do?
Shirley: When my parents were around, they were entrepreneurs. You know very typical of Chinese family that they own their own businesses or they work in their families businesses. My parents were not unlike many entrepreneurs that are from the Philippines and but I also moved to Guam when I was a child. So my dad being the entrepreneur that he is. He moved his family to Guam, the same Guam Island that's always getting threatened.
Steve: That's the North Korea sorted it.
Shirley: I’m going to “Hey, that’s my island. Don’t do that.”
Steve: Okay, now obviously coming from the Philippines at Guam which is a U.S territory as I recall, that's probably a pretty big shift in terms of lifestyle and just expectations and maybe the whether it's the same. But how was that different if any if you remember.
Shirley: Well as a child, this a funny story because in the Philippines it's common to have housekeepers servants things like that, right? So you go from that to being the house servant. I'm the girl of the family, typical my mom was very traditional so she made me do everything, I mean she made my brothers do nothing. So I did everything, I became to serve it. So there you go.
Steve: That's pretty.
Shirley: House cleaning now that's all I can tell you.
Steve: Yes, I like that. Now, how about the siblings you mentioned a couple brothers?
Shirley: Three brothers.
Steve: Are they an entrepreneur in anyway?
Shirley: My youngest brother is. He runs his own computer services and stuff like that. He's a computer nerd. I don't know what he does exactly but he's very good at it.
Steve: I like it, yes. there's always room in the world for more nerds. Well, probably some of your scrappy Entrepreneurial Drive came from all that work you had to do as a kid right?
Shirley: Absolutely when you're exposed and that's your environment that's really all you know right? We are a lot of our own environment for sure. I remember my uncles had watermelons everywhere, one a couple of years. So it's just crazy, crazy things that my family and the relatives have done over the period of time.
Steve: Like they were raising watermelons?
Shirley: My uncle got into this, I was a kid, I don't really remember in the details of them you know how adults don't tell you anything. But I remember like we live in a family compound and there was just, you come home from school one day it's like watermelons everywhere it's like an explosion watermelons. But it's like they harvest it had no place to put it so they just put it in the family compound. It was everywhere and our compound was not small. There's like four or five houses because people also live in clusters right? So our family all lived together, uncle number one, number two, number three, they all live with Grandma right. So this family compound that would consist of four or five houses right? Concrete houses and stuff right, no. So that an explosion of watermelons everywhere. That scene in my head is still very very vivid and on that day my aunt gave me five pesos so I remember that day very very clearly, I don't know why.
Steve: Find money, five pesos at the time was probably…
Shirley: That time the conversion was better than 50 to 1.
Steve: Yes, today Philippine pesos around that fifty to one mark. So how about university, did you go on to a university?
Shirley: I went to the University of Guam for a year or so and then I moved here to finish. So that's why I moved to San Francisco, that was primary reason why I moved off Guam.
Steve: Okay, so from Guam, you came to San Francisco, did you go to a university there around the Bay Area?
Shirley: I went to a Business College. You know Golden Gate University it's well known for being just business classes. I chose that in particular because I needed to work during the day and then go to school at night. So that's how it worked out for me
Steve: Makes sense how did you like that experience of the education working during the day going to school at night?
Shirley: I don't know. I just, it is what it is kind of thing. I didn't think much of it because it's what I had to do. So but it worked out.
Steve: Yes, that's funny because for you, you're like this is a job that he's done what's to think about. Once that time it's like you're working all day and school and all night when it's not time and you're like “Yes the job is done, I'm doing it”
Shirley: Right. And I had to pay rent and pay for a car and all of the stuff that you do right so and back then it was probably easier. Now that I have kids that are at that age now, I'm liking I don't know how they do it if we were not around.
Steve: Particularly the barrier where it's the economics of it are insane. The cost of living down there it's very very extraordinary.
Shirley: 25 cents get you six minutes on the meter. That's how they raise your taxes, they raise your meter cost.
Steve: Yes, the parking meter. Are now is that the meter for parking?
Shirley: Meter for parking, yes. I grew up about that, that's one of my pet peeves.
Steve: Well again, I just...I was in San Francisco last week just for spell. But it just the amount of economic impact that Barry has had you can just see it. Everything is so wealthy and it’s just an extraordinary place but probably quite challenging for young people to make their way in it.
Shirley: For sure.
Steve: How about out of university it sounds like you're already working. What would you consider your first proper job was it the one you had while you were going to school or one after school or what's your thoughts?
Shirley: That's actually a good question. Proper job, so do we define proper job like working for somebody in an employee, employer...
Steve; Yes, kind of whatever you want to define it as but that's kind of a typical.
Shirley: Yes. So first proper job probably didn't have one, because when I was working I fell into this opportunity where I was able to start a business during the day and went to school at night and I just accidentally landed into that situation. And so since I started that I never really went to work for somebody until like I was older. Like after I sold my company then I went to work for somebody. So that’s my first way of how everybody else normally want to do it, right? And an afternoon it was interesting because I thought for the longest time, I want to go work for somebody. Let them make all the financial risk and all the financial decisions. I'll just sit here and take orders and I didn't like that either.
Steve: Well the old saying, the grass is greener pops up regularly.
Steve: Well we're in the madness of running our own business it's like there's got to be an easier way, and then when we're in the quote unquote easier way we're like this is terrible. I don't want to take orders from somebody else or I don't like not having control or I don't like not having an impact, whatever the case is.
Shirley: Why don’t these people just listen?.
Steven: Yes, I'm sure people have worked for me, I had the same thing that guy's an idiot. Why didn't he listen to me?
Shirley: I'm sure my employees said the same thing about me.
Steven: Yes, it happens. So I like it that you are already owning your business and going to university. But you did imply that you went to a regular job later or you work for somebody else, tell us about that real quick.
Shirley: So are you referring to after I sold my business and I ..
Steven: Yes, you mention after you sold you want to work for somebody.
Shirley: So after I sold my business this is in 2009-2010. I went to work for the Knot they're the largest our wedding portal right?
Steven: The Knot, yes that's a big guy
Shirley: And I worked for a year right? And it's not so much them, there is processes right that things the way they need to do things. I understand but I think it's more like on me where I work for myself for so long, that you to go from wearing that hat and all the responsibilities that goes with it and then going to work for somebody then you go “why are you doing that?”, “Why do we have to ask about this?” “Why do we have to ask you that?” You start going from that hat to that, I always lifted this way I was, I got it done in a week, now I have got to wait a month, right? You go for things that is just difficult when you've been on your own for too long.
Steven: Yes, I totally understand not having a kind of worked in a proper job myself. Probably since I was in college and it was a janitor there's just the concept for me to go sit somewhere and have somebody else tell me what to do. It just a foreign concept to me, It would be like speaking a different language that you have no training and it's just a crazy notion. So it sounds like you share that, and that part do you think that comes from the entrepreneurial background that you had already put into yourself but from your parents and so forth?
Shirley: Probably, I think so. I think that definitely has an impact right? You know how some people say can't teach an old dog new tricks. So that could be, right?
Steven: Alright. Number one, how dare you call me an old dog?
Shirley: I’m talking about myself.
Steven: Oh, sure. Now that is a failed attack. I totally agree with you. So how about from then to now was there a particular defining moment that's the student on your mind they kind of put you on the path to what you're doing today?
Shirley: So all these years that what I'm working with the product that I'm working on today. What has a lot more meaning is it has a lot of meaning to me right? It's because all those years of working as an entrepreneur and then going work for somebody, and then I switch roles and then I became a consultant. All these years of sitting and as you are doing right now, we all set to do our ward, are my job is mostly related to this whole computer setup right? I don't do physical labor like other people do physical labor. So my work consists of pounding the keyboard and getting things out, getting things done, coordinating projects. All requiring communication, email, writing all of that. And that years of just doing that type of behavior and in leaning forward sitting, poorly sitting, badly sitting, with my legs crossed. All those has impacted my health and so what happened was I got to the point where I couldn't function, I couldn't sit, I couldn't stand, I couldn't use yoga, the yoga ball. And to the point that my doctor is basically saying “I think you're done”, what do you mean? I can’t be done, I'm too young to be done right? I want and I'm saying no though I look but I can't be done. So that's really pushed me to like there has to be a solution, there has to be a way to do this, and I try all the other things in a marketplace. Wearable posture, corrector strainer, the yoga ball, the knee chair type, where you need your knees or “like oh my knees is killing me I can do that either”, so I try to standing this. I actually sit in stance on price, I have a standing desk right here. So I've tried everything and I can only stand for so long when I sit my hip hurts, right? Especially a word if you're at least at home I can do my flip-flops or something but if when I was working at Yahoo where I was wearing heels, I could have stand out or either, that might be we're killing me right? And that's I ended up being just like barefoot as using a standing desk.
Steve: Yes, all of those, I mean you went through a series of attempts to solve this problem, right? Your physical well-being, your comfort was driving towards on how do I solve this and each of these things. So was there a particular part of that, that just kind of tipped you over the edge maybe it was when the doctor said you're done, It's like “hey we're putting out to pasture”.
Shirley: Well yes. Not that definitely was an impassive moment in my life because and I actually did take time off right? I listen to the doctor. You said earlier I was a good student, I am. I actually listening. This is what the doctors saying take some time off, but during that time off and definitely the radiating pain it ease up right? And I could sleep better, but because you're always like this all the time. But I was the other part of it drove a lot of and it's an emotional turmoil with them, like my confidence is like I'm not productive, I'm not contributing, I felt my self-worth right? I think I don't know about other people but my self-worth is very much tied to what I do. And so I felt that well I'm useless now. Like that confidence right, so that's why I felt like I had to go back. And my new Steve, I was doing all this when I was doing consulting, when I went to work for Yahoo, I was hiding all of this. Because who wants to hire me if I was doing all that right? So I have to hide and put up a good face. This is I'm good, I'll jump on the next train to do whatever you want. So I had to hide and keep all of this all internally and not be able to really share it. So this was really the first time I'm actually sharing it publicly like this is what happened to me, this is why I created this product, and this is why this product is so important. That I thought, I really needed to get it out there.
Steve: Well and the product we'll make sure we get links in the show notes and everything for the Awesomers out there to take a look at. But you call the product as I recall it's called the Posture Keeper, right? The point is, Shirley invented something from her experiences, right? And trying to solve the problem, and this is not an uncommon story for inventors and entrepreneurs in general. We have a problem ourselves, it needs solved we research and try to apply the existing “solutions” and if they don't meet the needs or there's some better way to do it. Awesomers out there like Shirley, I'm just going to do it myself. So take us through that next clearly it defined you as like I've got this problem, I need to solve it for my own health and well-being. How did you get to the point where you're like okay, this idea it has merit. I'm going to start trying to make this thing, that seems like a scary proposition for most people.
Shirley: So I sat on this idea for a really long time, actually. I created this concept like I think early or late 2013, 2014 and but I didn't think that people would want it, right? So I just basically created myself. But early last year, early 2017, I actually had a chance to talk to Kevin Harrington who's one of the original shark tank guys. And my client at that time Perry Belcher said talk to Kevin about this. And Kevin was right there and I go, “Hi Kevin” I guess I’m supposed to talk to you about this. When you're there, you just going to grab the moment. So I thought that was the universe telling me “Go talk to Kevin and see what he thinks.” I showed to Kevin the drawing and then I did a video demo for him using a prototype that I had, which was basically a backpack strapped to my chair that I jigged up to make it do what it does. So I showed it to him he goes, “I really like it because you need to make that, I want one.” So, he goes to file a provisional patent for the idea, don't talk to anybody else until you do that and then go to work. When Kevin tells you to go to work, you have to go do it or else he'll never talk to me again. And that's what really just pushed me to go do it. He showed me some other products, he goes this is what's wrong with this one, this is what's wrong with this one, this is why I think yours is better. And I basically trusted him, I trusted him in his experience, people are always pitching him all the different products and gizmos and gadgets. I'm sure you've seen a zillion of things right? What all the experience he has with us seen on TV. So that's why I just basically said if Kevin thinks that there is a passenger for my train for this product, why not? I'm an accidental inventor, that's what I say.
Steve: Yes, I like that definition and again that's a clear defining moment right? So it's not like you said you were consulting with Perry Belcher?
Shirley: He was my client, but he's part of this group called War Room. You know, you're one part of War Room, right?
Steve: Yes, War Room is a mastermind put on by digital marketers Perry Belcher, Ryan Deiss, Roland Frasier. And these guys, they bring a lot of talent, they bring a lot of people into the room. It's a very fun experience and it sounds like you are in a War Room meeting.
Shirley: Yes, yes!
Steve: I also happened to be there. Perry being the connector that is put you guys together.
Steve: That got you on the road, so I like that. That's a very intriguing story. So once you got the idea going and kind of Kevin help light a fire under you. Was there every time you want to give up, where it's just like this is too hard, this is not going well, is there a time you just want to walk away and say you know c'est la vie.
Shirley: No, no there wasn't. So that whole thing, let's say we were to time to snap that right. If I talked to him in somewhere in February or War Room event at that time and then it went to the next piece was that he introduced me to his factory guy right? So there was another sort of like for me a good sign and then I really just hit it off with his factory guy. He's been taking me by the hand, okay Shirley we're going to do this, we're going to do that, going back and forth on the drawing. So the thing is what's different is that I didn't have a design team, so I had to design it myself. Taking this prototype and all the things that's wrong with it, how do I make it adaptable for all the different sized chairs, from a regular chair to a gaming chair right? Because people are who are sitting in gaming are sitting for hours on and playing games. I should know because I got a 16 and a half year old that does that when I'm not yelling at him when he's done with homework but “I'm done with my homework mom”. So what can I say right? So I had to design it to make it fit so we were different reiteration. So I haven't given up yet in terms of that piece. That's been a fun learning experience. I got a great factory who was working with me, I went to the factory saw how everything's were being made, making sure it's not one of those factories that are kind of dicey that makes you kind of like am I going to get my delivery, are they treating their people well, so clean, very clean, very professional and so it was very happy about that. And yes, here we are and so I wanted to make sure that the piece of the product was we nail it first before we brought we bring it to the marketplace, whether I did a Kickstarter or Amazon right? Because if not, I didn't want to have to sit and worry about that piece. I hear a lot of Kickstarter entrepreneurs where they get all their Kickstarter piece. But then the delivery for the product is the part that's questionable. So I was really worried about that myself you know if I didn't have that piece nailed down. So I wanted to make sure that piece was nailed down completely, that the only thing I had to now worry about was the Kickstarter marketing piece.
Steve: Yes, that's very smart. I do think that particularly when they have a successful campaign, the logistical fulfillment of it is often overlooked and it's not as hard as people think it is if you know where to look. And if you know the resources are deployed, I was helping another colleague and somebody I'm on their Board of Advisors. I don't remember it ended up with thousands of thousands of orders from their recent crowdfunding event. And in their case it was easier to ship most of the orders from China using the ePacket service. So you know thinking ahead about the logistics we were able to say, Hey let's find somebody in China who's an expert who can take and ship within a day or two thirty five hundred orders or whatever the number was using ePacket service to the 55 countries that it covers. It changes the paradigm of you know is it easy do you have to ship into the US, and then break it up and ship it out on the higher price. There's just so many ways to do this, so I'm glad that you were thinking about that from the very beginning.
Shirley: Definitely we're exactly doing that way. Worldwide shipments out of China and then the rest of it from the US will ship into the US and just ship it to the US. My product is oversized for the ePacket, so not quite fitting the measurement right? ePacket when you're under X and size and under X weight, it's a lot more economical to do it that way.
Steve: Yes, exactly right. And for your size product, I would definitely do it exactly what you described. Worldwide shipments originated from China and then any US would be consolidated staged here and then shipped here. So that's very smart. Now let's talk a little bit about the marketing that you had to put into a crowdfunding campaign or even the origination. So once you have the idea and you have the design, what was your next step to decide between the different crowdfunding platform?
32:11 (Shirley talks about Kickstarter and IndieGoGo.)
Shirley: So my research shows that basically there's really only two, right? The two main ones, Kickstarter and IndieGoGo. And what Kickstarter, it's an all-or-nothing deal. And with IndieGoGo, you can sort of fund after a certain amount they will let you keep whatever you race outside your field goal. So meaning that if you have $10,000 goal in IndieGoGo but you only race five, they'll still let you keep that and that way you can make production, so with Kickstarter, it's like all or nothing. I think that's part of the strategy as well, one advice is set a realistic goal, right? So there's the factory goal where you need to get X numbers, to get it done and then there's the realistic goal of; can you actually do it, can you actually get there and then build into the campaign all the fees that you're going to have to pay. You're going to have to pay Kickstarter fees when you add it up five plus three that's eight percent right there, then you have agency fees if you're going to engage any of the agency. And unless you have a really really strong email list, some people don't want to pay the agencies, but the agencies are there for a reason, their experience. They have a list that are super backers and people who are interested in hearing about new products right? There's a built-in component of where they have their list is valuable, and that's why people engage agencies to have them come in on the campaign and broadcasts to bring in super backers as an example.
Steve: Yes, for sure! So there's a couple things I want to unpack in there, the first is, the difference between the all-or-nothing or the parcel is a pretty critical difference between Kickstarter and IndieGoGo and I want people to pay close attention. IndieGoGo.com is a world-class crowdfunding platform and Kickstarter.com also world-class crowdfunding platform. Yes, but they do operate differently and I think in some ways their audience is even a little bit different at various times. A lot of people I know have run a Kickstarter campaign and then a few months later will run an IndieGoGo campaign. Without really the concern of, they saturated the crowdfunding market. They could still do it. How about year, I've always found that there's a big international component to these crowdfunding campaigns. Did that work in your campaign? What was the percentage of International versus US.
Shirley: So I look at that every day right? Definitely, it seems like a third of our campaign is coming internationally, which at first initially I didn't want to do that. And part of the reason why I initially I didn't want to do the International was because, my package is like this big after I squeeze the air out of it. It's still Desai's, so fourteen by nine, by six and a half, and I was thinking, “man that's going to kill me” on the shipping right? but and then somebody said oh but then you could subsidize it, you could charge a little bit for it, to make it enough so that the price point makes sense for the buyer at the same time. Still makes sense for you because you're reaching all these customers that you otherwise would not reach. And how else can you advertise worldwide in a way that's so economical outside of Kickstarter, right? So it's going, “okay that makes sense right?” so and that's exactly what we did.
Steve: That's good! So about a third. I've had experience where between that third as much as 50 plus percent has come from international. So it's a really intriguing way to reach our international audience.
Shirley: Right, right.
Steve: I think it's really a unique opportunity to reach an international audience especially if you can get the logistics. And one of the differences by the way between IndieGoGo.com and Kickstarter.com, is that in at least this is how maybe 9 or 12 months ago when I was last looking at it. But IndieGoGo you could set different shipping rates by different countries, whereas I think a generic flat fee makes it a little harder to predict in and as you say you had to subsidize in some way so, hopefully, people will investigate what makes the most sense for them if they need that flexibility of fundraising limits or shipping or whatever, then they should maybe look at the IndieGoGo side But if they are fine with some of the restrictions that Kickstarter has, then Kickstarter certainly has I would say, just a little more premium of a name is that..
Shirley: I think there's probably more people on Kickstarter as a community. That's what I'm told, that there are more people, I think over 2 million or something like that. So I don't know what the number is in iGoogle, but I heard that it's over 2 million as a community of backers that are active.
Steve: So the other point you raised earlier was there this idea of some people don't want to pay for agencies, but agencies I actually can deliver value and I think that's an important point for the Awesomers out there listening. I think too often we're myopic in our perspective it's like I want all the money, I want to give no money to anybody else it's like great. Whatever you get is going to be a smaller pie than if you work with experts, you work with domain experts, to figure out how to make your most successful campaign possible. And the agencies with access to super backers who already have them in the email, they already know how many campaigns they back, they know if this type of person will be more or less likely to participate in your campaign right some people are like, I'm only doing games and arts, and other people are like I'm only doing consumer electronics. You know gadgets, whatever. They have a profile of these things, to me, that's a really good thing did you end up using an agency?
Shirley: Yes. Yes.
Steve: And you find them to be additive to your launch?
Steve: Okay good. So they delivered value for whatever pound of flesh that they required.
Shirley: Yes, yes
Steve: Agencies work on kind of a commission basis. They'll take a cut of the action.
Steve: You know there's upsides and downsides to that but, you know I like alignment of interests, who's the margins are there as long as the economic model of the product launch is still viable. Then I don't mind taking a look and factoring in agencies as you go.
Shirley: You definitely have to do a spreadsheet for that. I did a really hard spreadsheet on like what with the different race amount building all the expenses. How much are you in for? and also how much you are in for the different ways to look at it right? so if I allocate out what you would amortize out so for example, what I necessarily plunk in all my patent costs, now if I take that out, then numbers look a little bit better right? Now if I wanted to recover all in a year, of course, I want an ad all in. But if I take it out, it seems more realistic that you don't amortize, you don't get to write off your whole entire associated with the launch for this, because you get to benefit from that over a period of time. And not just for this long, it's not like one and done right? So if you allocate those expenses that are one and done true to the Kickstarter, then it looks you can really figure out the math a little bit better.
Steve: I do think it's an important point to remind the Awesomers out there listening. That this is just one check mark on the journey, one milestone. This is not like “oh we did a Kickstarter we're done and we're going home and that's the end of it. This is just the beginning right?
Shirley: Right, absolutely! And you know our good friend Perry Belcher tells me that “Shirley you're not supposed to make money on the Kickstarter “ It's a way to get your awareness build out there. So you know I was keeping in the back of my mind that he's telling me that right. That's how I figure out my numbers like how much I was going to charge for it, how do I price things out, and then how do I configure how much more to spend, how much to agree to give away to the agencies.
Steve: I think that's smart. Again, I think often especially when people get excited about an idea, or an invention, or a product launch they're building their own brand whatever it is. They really don't do the unit economic math to the level that it needs done. Because they just kind of we mentally are all doing this math in our heads, right?
Shirley: Me too.
Steven: Yes. I mean we all do. I still do it myself, but I won't generally pull the trigger until we run the full numbers but in my head I may say “oh well this costs four dollars but really that's the ex-works price from the factory so it's not four dollars, it's four dollars plus the amount to get it to the port and for the part to the next part and for the next part to the warehouse and then the incoming inbound shipment to the warehouse whatever the receiving fee may be, then the storage costs, whatever those warehouses are handling plus whatever tariffs, whatever customs, duties, sometimes there are things known as countervailing duties, if people haven't heard of that. Sometimes there's anti-dumping duties.
Shirley: Yes. For candles and things.
Steven: All kinds of products have anti-dumping on them. So without understanding all those economics and by the way, that's just what we would call your landed cost.
Shirley: That's right.
Steven: Now you just have the landed cost, some people refer to this as DDP price, which means delivered duty paid but that's just the origin of what your cost is, then every time you ship it somewhere else either to a customer, or to Amazon, or to some other staging where else, that adds or cost your product and so I really want Awesomers out there to understand every touchpoint. Every time that product is fingerprinted, that's a cost. Every time you have to manipulate or otherwise move that inventory, even just counting a majority there's a cost to it. So all of those things, please don't forget that's part of your basic economic unit model. And then, the things that Shirley talked about agencies this is marketing related, promotional, giveaways, all of these other things are the second part of that model. Once you know your cost then you have to figure out now what's the marketing side of it. And too often I think people miss that is, I know that you're a very big systems believer, and so is it some of your system's background that helped you get your economic model right, to begin with?
Shirley: I think so, I'm a preparer and I'm a worry where at the same time, so the worrywart makes me more prepared and that's the reason why I functioned the way I do. But definitely, I think it's the whole process piece that I need to know what I'm getting myself into. So as you as to your point right, I had two built in about 25% into my landed pieces that the duty, and the tariff, and then also the pick and pack, the container costs to the warehouse, and then when they unload it how much are they going to charge me all of those pieces, so at the building about 25 percent so that's a lot right on Steve?
Steve: Yes, it changes based on different products right sometimes the product has a higher touch or a higher weight or higher handling, but I think that's a reasonable number to consider for sure. And again that's probably on the more efficient side right? Using a container or LCL or FCL rates that's reasonable, but I know some products that have 70% anti-dumping so 25% get the job.
Shirley: Right right.
Steve: But it's one of those things that you just want to know, but I like the fact that you work that through, and also that you have this very, although worrywart is not the strength that I want you to focus on because there is no worrywart Olympics.
Shirley: Yes, I know. I will win by the way.
Steve: Yes, you’re ready for the competition.
Shirley: I’ve been preparing all my life.
Steve: I love it, so well we're going to break when we come back we're going to talk a little bit more about the crowdfunding and get some of your predictions about the future and we're going to do that right after this.
Empowery, the name says it all. Connecting E-commerce entrepreneurs with great people, ideas, systems and the services needed to sustain business dynamic into growth. Empowery is a network; a cooperative venture of tools and resources to make you better at what you do. Because we love what you do. We are you. Visit Empowery.com to learn more. You're listening to the Awesomers podcast.
Steve: Here we are, we're back again, Steve Simonson Awesomers.com podcast joined today by Shirley Tan. And we've been talking about crowdfunding, we've been talking a little bit about Shirley's origin story. But we're you know we've been recently just discussing this idea of unit economics and before the break, I teased this notion that we should figure out now what's next in a crowdfunding campaign. So now that you've got your landed unit economics you have some may be an agency aligned with you, what did you do next?
Shirley: But so what I'm about to do next?
Steven: No, no in the process because you've already launched. I want to get us from kind of the product economics and the marketing to the actual launch day. Because it seems like there's a lot of steps between that.
Shirley: So we did a lot of the campaign page, so a lot of time went into the campaign page and I think that you know the video and the campaign page is the most important thing, because that's the front face thing right. That's what people don't see all the stuff that you did in behind a scene. All they're running around with the factory they don't see any of that, and you could try to tell a story which I think we did a good job in telling the story about how I, you know, came to create this product, but the campaign page is critical, critical, critical, the imagery Kickstarter likes and I think it's the same probably for IndieGoGo but Kickstarter's people this community really respond to images. Even if they don't read anything, your images have to tell the story of what you're trying to convey, because you assume that most people will not read half the stuff that you write, right? So people kind of tease me that I have a super long-form sales letter, right? Which we in direct marketing, calls that right and it's a super long-form sales letter, but you know I think that's okay because that's what people respond to. And when I was doing all my research, all the successful campaign pages all had a super long pages lots and lots of pictures. Which words sprinkled in between, and I think that tells me that, even if people don't read they should get it. They should get what you're trying to do, just in the images alone.
Steven: Yes, it's a really good gold nugget there. First of all I think that long-form is very appropriate and especially with so many people on mobile devices that they don't mind scrolling, that's just part of it you know in the old days it would be like half a page, bottom a page, and the breakage, and it's like now they're just going to scroll and particularly when it comes to crowdfunding campaigns it is a common thing for people to scroll through and they just want the highlights that this is the same thing with the idea of impact marketing right? You want to have that immediate impact and draw their attention, and the more of those images and the more of the story is being told visually, then they might dive into the research piece and one of the particulars what are the details. But really I think your campaign was well served by that strategy. So did you employ a bunch of outsiders to help you with those graphics, did you do them yourself how'd that go?
Shirley: My cousin, who's my business partner in this, she did a lot of the graphics, so we talked of this we went through all the elements that needs to be what is this purpose for this image, what is this message for this image. Every single one has a purpose because otherwise you also run the risk of confusing people, right? And then too much information like, they can't make heads or tails especially if they're not reading. So we did a lot of that work we actually have to cut out a lot of stuff. That's the hardest piece like I just want to throw everything up, but then you have to edit back down and say have that discipline say no this one, doesn't do what it's supposed to do, this one has to be changed. So my cousin did a lot of the graphics we did get some help from virtual assistants, and then had another person who takes care of all the emails, and he's a contractor, and he did all the emails, all the writing of all the Inga's, all the messaging so I have a really good small small small team.
Steven: That's great. Yes, I definitely appreciate the fact that, you not just put people around you to help with the process, but that you had the discipline to cut back when you needed to. That's we often are so enamored by our own creations. Hey, we made this graphic it cost us time and money and so we want to just put it all out there.
Steven: I could take lessons from this myself I used to do a lot more blogging in the old days and you know I wrote one articles like ten thousand words and you know somebody came up there like a “Shakespeare said brevity is the soul of wit” and it's like, well that makes me witless because there's nothing brevity about this. And so I do want to remind people that getting the people across the finish line with the least amount of material and collateral material whether that's visual graphics, videos or written content is probably the best idea in general. This would be you can have links to other stuff somewhere else but, get your point across get the job done. So Shirley, once you got to launch tell us about that first day because it sounds like it was a pretty exciting 18 hours.
Shirley: It definitely was, I didn't set out the goal to like achieve the campaign, the goals within the first day. It never even dawned on me it didn't hit me until I think was like 5 o'clock that afternoon or something like that. Where we started seeing the movement and people up coming in and I think at five o'clock in the afternoon, we were like 7,000 or something that was five o'clock or six, so I can't really remember it was all a fuss. But that's when it dawned on me like “Oh my god we could actually do it” so that's what I was kept pushing harder, I was like who else am I not called, who else have I not reached out to, who else am I not emailed. That the initial, especially that initial friends and family lists right? That you have what somebody like who I know is just super busy, but I'm going to make them drop everything. So we have a small list, we email they're all out and then there's the follow through right because people do get busy. They want to help, and they want to support you, and you just have to kind of like nudge them.
Steven: Yes, so I think that obviously, it was the right concept to consider and it clearly worked. One of the things that I want to remind folks out there who considering crowdfunding campaigns that initial momentum is really really critical for you to get any sort of visibility on the platforms themselves. To get into the news alerts or they don't come news alerts, like newsletters or any mentions or to get visibility on the website, it's all based on the velocity of how fast you're raising money, what's the commercial rate, all those types of things. And I think your campaign was probably rewarded based on your first day being so positive.
Shirley: You're exactly right, Steve. It's just kind of like the Amazon or the Google algorithm, you don't know what it is. But if there's a certain traction that hits you get rewarded somehow, you stay on the first number 12 positions in Amazon right? so I think Kickstarter's are very similar as well where there's different projects, so there's our projects we like, there's no projects we love, there's the trending, there's in within each category like product design, how do you stay up there. I think hitting the number, they always say the first 24 hours, 48 hours is the most critical for Kickstarter, because it's the algorithm that kicks in and you don't know how it works. But you know it's something like that related to the activity, I call it activity there might be a smarter term, but I don't know what else. They say that it's not necessarily just the goals and the money that's coming in, but also the activity and I think that's why there's a lot of people who do the $1 campaigns. So when I first started Steve, I didn't think I was going to do a sec, why do I want people to bother with $1.00, right? So it's like, I realized somebody was telling me that it has to do with the activity. You give people a reason to support you even if they don't want or need your product they just say “Hey that's pretty cool, I'll give it a dollar, I'll give it ten dollars” so those campaigns, I think you guys can see it I haven't looked at the numbers but, there's a number of the $1 activities that has come in just because. It's just, the $1 is just because.
Steve: It's so interesting, and even kind of odd phenomena, but the reality is you know some people are like “Hey, I want to show that I'm supporting a bunch of campaigns, it doesn't matter if I put a dollar down or a hundred dollars I've supported all these you know various campaigns” so that adds some credibility to their profile. But the conversion rate of people going there and then making any sort of contribution or buying one of the perks, that's something that definitely has an impact in it. Shirley said we don't know the exact math but it's highly talked about that if you can't get about 33% of your fund raised goal within the first 24 hours, then you can almost forget ever making it into any newsletters on to any trending, any charts of any kind, at both IndieGoGo.com and Kickstarter.com both of them you'll just fall off the map if you can't raise at least a third of the money in the first 24 hours. That's the general wisdom not take it to the bank this is a published algorithm. That's the general thought. So again, kudos to you guys hitting over a hundred percent on the very first day and then continuing after that, you're almost 400% of the original number at this stage. That's cool.
Shirley: I was just looking at this, there's 93 folks that gave us $1 Thank You 93 people!
Steve: 93 see, and that's what a great vote of confidence, what a great little shout-out saying “hey we like what you're doing here and we're going to make our vote with a buck, so that's really awesome” So Shirley think about, think about the future of Posture Keeper and some of the things you're doing. Is this a product that you know in five years is going to be in big boxes, it's going to be going around the world. Well, what's your vision for this thing?
56:10 (Shirley’s prediction about the future of Posture Keeper.)
Shirley: I hope so, Steve. I hope that stores will pick it up. I think as you very well know right? Distribution is the key thing a success to all products. That's why people show up on shark tanks right? Because they're trying to get Laurie and Mark and Mr. Wonderful to help them bring their product to the big-box because that's where people see it. That's her ninety percent of people still shop in those stores, right? So having that visibility is, I hope that it will bring Posture Keeper to be more available out there in the marketplace but in the meantime, we're going to do, I just sort of did the reverse thing of which step first. So, for sure we're going to continue to say learning about the Amazon platform, by listening to podcasts like yours, and learning how to do how to optimize that business. And then having our own Shopify store, as well to bring in products that we don't necessarily sell on Amazon but we want to make available to the audience that we're slowly building up as well. So we are going to just do, just like what everybody else is. Say is best business practice right? Which is now once I fulfill on all my Kickstarter obligations and promises, then we move on to the Amazon platform and sell in the Shopify store, and we just keep plugging away until people hear about it.
Steve: Anyway, a bright vision indeed. We'll put all the links in the show notes to Shirley's Posture Keeper campaign even if the campaigns over by the time you listen to this. You'll still be able to go and see how the way the page was lay down and you'll see that the history there that's one of the things I love about Kickstarter. By the way those links are very useful downstream, they actually have good link juice. And I'm sure they may or may not know this, but you can change those links over time even after the campaign ends. Sometimes you can add different links in their thing and they can be rewarding for you, so a lot of little SEO benefit that people don't often.
Shirey: It’s good to know I didn't know that.
Steven: There's a little Golden Nugget for Shirley. Shirley, I really appreciate having you on. Any final words of wisdom apparently with the Awesomer community out there?
58:37 (Shirley’s final words of wisdom.)
Shirley: So one Kickstarter tip that I would say is and I had to learn just the hard way, so when you're working on your campaign page, make sure you don't have two people working on it at the same time. Make sure you copy, I personally like working in the campaign page because I like to see how the images are laid out, and how is positioned, just like your blog page. You want to see in the real time right? So what happened to us? Is my cousin and was working in it, I was working on it, whatever I was working on it, when she saved it, wiped it out. So do not let that happen to you. And this is one of those things that nobody, I've not read this nobody's ever talked about it. So we've learned the hard way so, only one person working in the campaign at a time, make sure you close all your tabs because if your tab is open, and you forget, you could accidentally wipe out what she's doing or she can accidentally wipe out what you're doing. And always at the end of the day copy all of this into your Google Doc page. This Google Doc will let you copy images and if something does get accidentally wipe out which is not hard to do. I promise you, you can just do one little cursor move, an image will disappear, that's what happened to us a lot. So make sure you copy and backup copy into Google Drive that way you can at least bring it back and you don't have to reinvent the whole wheel, starting all over again pulling your hair out.
Steve: I love it, such sage wisdom. Thank You Shirley because that's going to save some people some time in the future. I guarantee it. Thank you again for joining us it's been a great pleasure to have you and for the Awesomers listeners at home we'll be right back after this.
Hey Amazon Marketplace professionals! Congratulations on your success today your creativity, strategic vision, problem-solving and discipline have allowed you to build your own E-commerce business. Wouldn't it be great if you had more time to focus on the things that truly drive the sales and growth of your company instead of getting lost in a dozen different services and countless spreadsheets? What if there was one system that connected to your Amazon account that automatically give you the information that you need it to make great decisions and really impact your business. Parsimony ERP can do that. Parsimony is the business operating system for your marketplace business. With Parsimony you get true double entry bookkeeping, easy financial statements, full customer service tools and item-by-item profitability along with project and task management and more features are being added all the time. Learn more at Parsimony.com, that's Parsimony P-A-R-S-I-M-O-N-Y.COM. Parsimony.com, we've got that.
Steve: You're listening to the Awesomers podcast. What an exciting time for Shirley and her partner, and their whole company and idea, right? Having a crowdfunding campaign even though it's a lot of work and a lot of pain putting it together, but having it come together and then getting it funded in less than 24 hours to their full initial goal of $10,000. And then here's just a couple weeks later there are almost four times that initial goal, and still climbing. So it's a really fun exciting time and I think it's a great reminder not only did Shirley share some wonderful origin story tidbits which should be both inspiring and instructive. But she shared some of the details about how a crowdfunding campaign goes together and I want everybody to remember the crowdfunding can be a component of any physical product business. So if you're designing something new, inventing something new, even if it's not necessarily new and crazy and wonderful like Shirley's, not to say hers is crazy but in other words it doesn't have to be some breakthrough invention like Shirley's is. You can have just the next iteration of a product and if there's enough demand for that type of product day to day, and you can illustrate the differences. Crowdfunding can be an extraordinarily powerful part of your marketing launch product process for a new product, and this includes launching at the same time on Amazon or maybe you'd launch Amazon subsequent to a Kickstarter or IndieGoGo there's lots of ways to do it the point is, this is another marketing tool in the toolbox. And I don't want you guys to forget it and I thank Shirley for joining us and telling us the way it is for her experience for crowdfunding. Now again, this has been episode number 64 of the Awesomers.com podcast series. And I want you to not forget that all you have to do is go to Awesomers.com/64 to find the links, to the show notes, and details and some of the things we've talked about in today's episode.
Well we've done it again everybody. We have another episode of the awesomest podcast. Ready for the world thank you for joining us and we hope that you've enjoyed our program today. Now is a good time to take a moment to subscribe like and share this podcast. Heck you can even leave a review if you wanted Awesomers round you will appreciate your help it's only with your participation and sharing that we'll be able to achieve our goals. Our success is literally in your hands. Thank you again for joining us. We are at your service find out more about me Steve Simonson, our guest team and all the other Awesomers involved at Awesomers.com.Thank you again.