With the rise of crowdfunding sites like Kickstarter and Indiegogo, businesses or inventions that might have been shut out by conventional investment channels can be brought to fruition with the help of an engaged group of donors giving just a few dollars at at time.
Thanks to these crowdfunding platforms, consumers have an unprecedented level of control over the niche products they really want, and entrepreneurs have more control over whether their business or idea gets off the ground.
But what’s most remarkable about crowdfunding is its unprecedented success. According to Kickstarter’s site, more than $1.6 billion has been pledged for more than 83,000 projects. That works out to more than 8.4 million individual backers and more than 22 million pledges.
We’re taking a look at one incredibly successful campaign, focusing on what led to its funding and how other businesses can find similar success through their own crowdfunding efforts.
Company Name: GrowlerWerks in Portland, Oregon
Campaign Objective: Raise $700,000 to manufacture a new growler for keeping craft beers fresh
Campaign Outcome: 10,293 backers pledged a total of $1,559,525
GrowlerWerks, founded in February 2014 and fully funded via Kickstarter by December of the same year, is led by beer lovers who saw a need for a better way for beer aficionados to bring home their favorite microbrews from neighborhood pubs. They improved upon the classic glass growler design, which can cause beer to go bad by letting in air and making the beer go flat.
The unique design of GrowlerWerks’ pressurized uKeg (pronounced “you keg”) easily sets it apart from its competitors. While others manufacture and sell growlers made of glass, stainless steel and other materials, the uKeg is vacuum-insulated stainless steel with a carbonation cap, pressure gauge and tap.
Earning more than double its funding goal, it’s obvious that GrowlerWerks hit upon a pain point that addressed the needs of a fairly large and dedicated customer base. This isn’t all that surprising, especially considering the microbrewery scene in Portland where the company is based. Boasting 53 breweries in the city’s immediate area, Portland has become home to the niche culture of microbrews.
Tapping In to Portland’s Craft-Beer Scene
The exploding microbrew scene has led to a greater number of microbrew pubs and increased popularity in craft beers. In 2014, craft-beer sales rose by 17.6%, which in turn resulted in a 22% growth in sales. It also accounted for 11% of total beer sales in the U.S., with more than 21 billion bottles sold. Craft-beer manufacturing is rising too, with 18% growth in the U.S.
These numbers alone make it easy to see why the uKeg would be popular, but couple craft-beer growth with Oregon’s concentration of brewpubs, and you have an instant success story.
Oregon ranks No. 1 in the U.S. for the most craft breweries per capita and ranked fifth in overall craft-beer production in 2013. This is all leveraged in GrowlerWerks’ campaign pitch video, which features footage of happy Portlandians being excited about the prospect of cold, portable beer, as well as brewpub owners excited by the prospect of selling more beer.
Lesson Learned: Niche products that address the concerns of a specific-yet-growing market can be successful. This is especially true if the industry is growing or if the business itself is an area where its target market is concentrated.
How Did GrowlerWerks Do It?
A quick glance at the company’s Twitter account shows that their campaign gained support from some fairly high-profile folks, including Portlandia TV, an account with 33,000 followers dedicated to a quirky show that takes place in Portland. Their campaign was also chosen by the Kickstarter staff as one to watch for. And thanks to a significant presence within Portland’s microbrew pub scene, people were introduced to the uKeg and could sing its praises based on personal experience.
Lesson Learned: Word-of-mouth advertising and recommendations from friends are key for a business’ ability to sell products or generate a name for themselves, especially during early startup phases. Also, leveraging the uniqueness of your community can lead to local promotional opportunities.
What’s Next?
Only 102 of Kickstarter’s campaigns have ever raised more than $1 million, so GrowlerWerks is in esteemed company. Following this achievement, the company is starting the processes of creating and mailing rewards to their backers and manufacturing uKegs for distribution.
Now that the project has been funded, communication with backers becomes critically important. Per their Kickstarter page, Growlerwerks’ last update was on April 3, 2015. Some of the comments are negative, reflecting some backers’ displeasure that parts of the uKeg will be manufactured in China. Some have also commented about what they perceive as a lack of communication from the company.
Lesson Learned: When a stranger has willingly donated their hard-earned cash to help someone else achieve their dream, constant communication is key. While the campaigner may be hard at work on getting the products made and shipped, he or she must not forget to keep their donors in the loop. Project backers view radio silence as a lack of interest or, even worse, abandonment of a project.
Using crowdfunding sites like Kickstarter can work for a variety of businesses. A quick look at current campaigns shows a variety of successful projects, including everything from baby blankets, to theater productions, to camera drones. By reviewing effective campaigns like GrowlerWerks, businesses can brew up their own crowdfunding success.
Think you’re ready to start your own campaign? Check out our article on how to get investors.
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