Kiwis' $US600K Kickstarter project seen through to commercial launch
UPDATE / March 14, 2013: Congrats to to Syrp - aka industrial designer Ben Ryan and cinematographer Chris Thomson - whose Genie went on the market today.
Last year, NBR chronicled the pair as they sought to raise $US150,000 to fund their invention the Genie through Kickstarter.com, then used the money raised - more than $US600,000 in the end - for more R&D and lined-up manufacturing in China.
Today, their website has started taking commercial orders for the Genie (a motion control with time-lapse photography gadget, aimed at film professionals).
Kickstarter continues to be hammered as various posters fail to delivery on big money projects - but this is a crowd-funded success story Kiwis can savour.
Well done, guys. Hope the orders continue to roll in.
With $US600K project, two Kiwis prove Kickstarter can work
Oct 10, 2012: Kickstarter.com recently tightened up its rules, telling entrepreneurs not to use the site like a store. Project posters now have to discuss risks and challenges, and product simulations are have been banned.
The changes came in response to some negative buzz. US broadcaster National Public Radio highlighted at least two high-profile projects funded via the site that have run into trouble.
An entrepreneur who raised $US10 million to make the Pebble, an iPhone and Android-friendly "smartwatch" that streams email and text messages has missed his first delivery deadline, and refused to provide refunds (saying all his money is tied up with potential manufacturers and lawyers).
Another, who raised money for PopSockets, "a snazzy iPhone case with a headphone cord wrap" has yet to begin manufacturing a year on from his round of micro-fundraising.
Our own Taika Waititi used Kickstarter to raise $US90,000 to help cover the release of Boy in the US earlier this year - then went AWOL from the site for several months.
I chipped in $20 to Taika's campaign, and wasn't particularly fussed when he more-or-less disappeared for a while (he eventually delivered his treat for my micro-donation: a link to a free short film download; larger donours were promised custom artwork). I regarded the money as essentially a donation to a good cause - and I'm sure many who've put a few dollars towards an artistic project on Kickstarter have thought along the same lines.
But now that Kickstarter has outgrown its arty roots, and is being used for more and more out-and-out commercial projects, donours have different expectations.
Which brings us to Syrp - aka industrial designer Ben Ryan and cinematographer Chris Thomson.
The two-man Queenstown company saw a market opening for a widget that adds motion control to time-lapse photography gadget.
They spent 12 months designing a prototype, which they called the Genie, then took to Kickstarter in March in a bid to raise $US150,000 for manufacturing (see their Kickstarter page here).
There are local micro-funding/crowdfunding sites like PledgeMe and SportFunder (which Commerce Minister Craig Foss reckons may need regulation and licensing). Good on them, but companies like Syrp are always going to gravitate to Kickstarter, where there are many more eyeballs, and lots more cash on tap. Kickstarter - which uses an Amazon payment system specific to the US - doesn't allow NZ projects to list, but if your outfit has a representative in the US you can easily skirt this restriction).
Ryan and Thomson weren't wrong about a gap in the market.
Syrp offered trinkets to small backers ($15 backers got their name on the inside of the box as a backer of the first production run, $30 backers a T-shirt).
But like most companies that post a project, its main incentive was steep discounts on the finished product.
For example, those who pledged $US590 will receive a Genie at $US500 off the retail price (of $US1090).
In May, Ryan told NBR that requests for manufacturing quotes had been issued, and he and Thomson had visited factories.
This week, he confessed "the project has taken a little longer than anticipated ... Overall the project has gone smoothly but a minor change in any part of the design can easily move deadlines around and that is typical for any product."
Actually, confess is the wrong word, as it's not like the Queenstown pair have been hiding anything. Through their biweekly Sryp blog, Twitter account, Facebook page and Instagram photo feed (user name: Syrp_), Ryan and Thomson have been a model of transparency, detailing successes and failures.
Syrp's Kickstarter backers have been able to follow the pair at every step of the process, including their current trip to a plant in China - where Ryan told NBR "we're overseeing production and will be here right up until the units ship."
That should be November.
So far, Kickstarter hasn't been a path to riches for Ryan and Thompson. The pair told NBR the $US636,000 will be accounted for by R&D and manufacturing costs, plus development work on future products. Still, it's provided the company with a solid foundation.
The US media has recently groused about Kickstarter's lack of refunds. But at the end of the day, people have to realise it's not a pre-order e-tail site. It's just like any other investment vehicle; to some degree, people have to take a punt on an idea, and the reputation of the people behind it. Through their savvy use of social media updates, Ryan and Thomson have built a solid rep - and that, rather than any regulation, is what's going to give people confidence in crowdfunding sites and keep them coming back.