GUEST:
In October 2014, I raised nearly $150,000 on my first crowdfunding campaign. Three months later, when I was in my final year of college and 21 years old, I wished I’d never heard of Kickstarter. I’d committed the cardinal sin of crowdfunding by shipping a shit product to over 2,500 people who’d backed my campaign.
It’s now March 2016, and my backers are back to being huge supporters. I’ve built a thriving business and somehow managed to graduate from school. I have emerged from the crucible of crowdfunding a vastly improved entrepreneur and (I believe) a better person. The following is my story. I hope it provides lessons for aspiring crowdfunders/entrepreneurs and entertainment for everyone else.
I launched my product’s campaign on a Tuesday night with a $12,000 goal. I woke up the next morning to pledges of $18,000 from hundreds of people around the world I didn’t know. Encouraging comments flooded my inbox. I was immediately hooked on crowdfunding.
I knew nothing about marketing, but my cofounder and I had put a few months’ work into innovating a useful product, making (what is obvious to me now) a terrible video, and putting together a passable informational page for our campaign. Through posts on niche blogs, awkward local TV appearances, and dumb luck, the campaign closed at about $148,000 after one month. The thing is, we were totally unprepared to ship thousands of products. To be clear, these weren’t items that already existed from an overseas supplier, rebranded for Kickstarter. Every component would have to be manufactured from scratch in a method that had never been used for this kind of product. We had precisely zero manufacturing experience but, thanks to Kickstarter and post-campaign pre-orders, over 2,500 people in some 70 counties eagerly and (mostly) impatiently awaiting delivery. We needed a new plan for fulfillment.
We approached an American investment casting manufacturer who, prior to our campaign, had given us a phenomenally-priced quote to make our product. Their manufactured prototype, meant to represent the quality of the full run, looked incredible. We were psyched to move forward, and we ordered a production run of thousands of units. We didn’t once visit the manufacturing facility during production — we were fully trusting, like gullible children.The finished units were sent directly to a nearby third-party logistics (3PL) facility to be shipped to our backers. A few weeks earlier, we’d taken two days off classes to show the 3PL how to assemble and pack the products. We’d then gone back to school, congratulating ourselves on our brilliant outsourcing and delegation skills. We wrote our exams and went home for the holidays.
We’d originally announced our intention to ship in December 2014, but due to small manufacturing delays and the fact the 3PL didn’t retain staff during the holidays (who woulda thunk it?), most of our North American backers received their rewards in January 2015, successfully ruining several hundred people’s Christmases. It was at this time that we discovered the error of our ways: Having not visited the factory during production, and having not assembled, quality controlled, and shipped the razors ourselves, we’d never taken a close look at the full production product — we’d just assumed everything would be great. So we deserved every moment of Kickstarter fury that was about to follow.
Feedback on the product began spreading like wildfire on our Kickstarter comments page, as well as on subreddits and forums relevant to our niche — and almost none of it was positive. Some of the comments bordered on hateful. When it was clear the quality issues weren’t isolated incidents but a consistent problem, I think I spent six hours staring listlessly out my apartment window like a character from a Sofia Coppola movie. I felt terrible. We quickly recalled all the unshipped products from the 3PL to my parents’ house to see what went wrong.
It’s hard to describe the experience of receiving dozens of emails and comments a day telling you some variation of what a bad person you are or claiming you’re running a scam, and having to respond to every single one of those emails with nothing more to say than “I’m sorry, I’m trying to fix it. I’m so sorry.” I’ve heard there are some Kickstarter project creators who have walked away from their campaigns without a trace due to the feedback they get from backers who are angry at product quality and/or delays. For a few days, at least, I understood those campaign-creator-deserters’ perspectives.
Seeing my new Eeyore-like temperament as I responded to hundreds of emails and comments from angry customers, a friend recommended the book, “The Obstacle is the Way” by Ryan Holiday. I took away a key lesson from that book: When you come face to face with a challenge, it is your choice whether you let it paralyze you or leverage it as motivation to learn from and overcome the challenge.
This lesson caught me at a fantastic time. School had not been going well, I was way behind on my undergraduate thesis, and I hadn’t interviewed for a “normal” job like my fellow graduating friends. I’d gone all-in on my now-sinking ship. I realized I could wallow in self-pity, or I could take ownership of my mistakes. I promised myself then to make it right with every single backer. I had no idea that it would take more than a calendar year, and the hardest year of my life, before I’d fulfill that promise.
Once the products were back in Toronto, I took the three-hour bus ride back from college every weekend and any day I didn’t have class for several weeks, doing detailed quality control on every one of several thousand pieces, and I came to the same conclusion my backers had — the products were shit. We learned later that the first article the manufacturer had sent us was heavily machined using a precision tool called a CNC. This resulted in incredible sample quality but was not representative of the results we’d get in the full investment casting manufacturing run. They’d known this, but they also knew we’d raised a ton of money on Kickstarter, had no experience, and wouldn’t know better. We also never bothered to check on their work. Our bad.
Having not yet accepted the true effort it would take to manufacture a product that had never been manufactured before, I found a local machinist who could adjust the part of the product that our investment casting manufacturers had botched. I cheerily assumed this would fix the problem, everyone would be happy again, and the angry emails would stop. The machinist was a friendly, experienced engineer, who ground down a few components while I was in his shop, expertly achieving the measurements the original design models had called for. I was so confident in this solution that upon receiving the products back from his shop, I happily assembled and shipped out everything to 2,500 backers, including free replacements for the several hundred problem-products we’d sent out in January.
Strike two. It turned out that the local machinist was an accomplished craftsman, but the task of grinding down thousands of razor parts was handed over to what I can only assume was an employee with two feet for hands. I’d blindly trusted a “professional” for the second time, and this time it really cost me. Having failed to check every unit shipped out, I didn’t notice that the grinding had resulted in a significant modification to the measurements of a critical, but not obvious, part of the product. If the emails and comments I’d received back in January were heated, the next emails flamed.
It was now March 2015. I’d shipped thousands of units that were almost a universal flop and had thousands more in my parents’ basement looking more and more like scrap metal. I’d lost the respect of nearly every customer I had. My unfinished thesis and exasperated thesis advisor compounded my problems. I hit rock bottom. I had made every mistake possible in manufacturing, and no one was going to bail me out. All I knew was that I’d made a promise to myself a few months prior — no matter what, I would make it right with my backers. I refused to break that promise. Fixing my mistakes became my singular focus. In March 2015, I committed to all my backers to make a perfect-quality product and send a free replacement — from a new, better manufacturing method — to every single original backer. The announcement was met with some words of encouragement from supportive backers (thanks, guys!) and also a whole heap of apathy from the hordes that had given up on me. I had no idea how I’d send out thousands of razors for free, but I’d committed to it. And now I had to find a way to do it.
I was fortunate to be introduced to an incredible team of engineers in Toronto, who quickly led me to several key conclusions. First, investment casting was not an appropriate manufacturing technique for a precision instrument. Second, with a more precise manufacturing method, some design tweaks would massively improve aspects of the product our backers had complained about. We’d originally chosen investment casting due to the relatively low upfront investment required to mass-produce parts in stainless steel. There’d been another option, called metal injection moulding (MIM), that was more precise, but the upfront investment was high, so we’d dismissed it back in 2014. Now, with what little remained from our Kickstarter funds, and by investing all my personal savings, we went forward with MIM manufacturing.
I’d originally committed to our backers that our product would be made in the USA, so we found one of the few MIM facilities in the USA and convinced them to work with us. I think they liked my ambition and the inherent challenge of being the first facility in the world (as far as we know) to manufacture this kind of product using MIM. After months of tooling, tweaking the designs, adjusting tolerances, and several rounds of manufacturing before getting the quality correct, I knew we’d finally made something great.
We finally began shipping out the free replacements to all of our backers in January 2016. Having learned my lesson from original runs, I have personally checked each of the tens of thousands of pieces for thousands of razors that have shipped out. We have developed exacting quality-control procedure and standards, and our manufacturing partners are doing an incredible job of QC-ing to my stringent standards as we transition away from me personally inspecting every piece.
I know it’s just a product and that, in the grand scheme of things, doing right by a few thousand people on a Kickstarter campaign isn’t that significant to the world of business. But to me, it has meant everything. It meant overcoming an extremely challenging obstacle. It meant real-world problem solving. But mostly, it meant following through on my promise to myself and to thousands of others that I would fix something. And somehow, I fixed it.
I think, despite what could be perceived as a lot of hardship, I did manage to do some things very right. When my cofounder told me he’d be going back to school in September 2015 and wouldn’t be available to help for the foreseeable future, it forced me to finally, truly take ownership of every aspect of the business. In lieu of creating content and doubling down on social media to try to get more pre-orders post-Kickstarter, I focused on more traditional retail relationships. I managed to book enough orders from international distributors that the deposits I required they place kept the business operating while we manufactured. We did continue to take direct customer pre-orders after the Kickstarter, but had I focused exclusively on trying to pre-sell, I don’t think the business would have survived.
Now that I’ve shipped out thousands of free replacements to my original backers, I’ve begun filling the thousands of additional pre-orders, wholesale orders, and international distribution orders. The biggest challenge has been ramping up production in order to meet the demand for our product. I’ll take my 2016 problems over my 2015 problems any day.
Somehow, amidst all this, I graduated from university in June 2015 and moved back to Toronto to focus on the business full-time. I’m in the process of scaling up and hiring staff to handle aspects I truly don’t have the capacity to do myself anymore. Ultimately, my experience on Kickstarter was so positive that I’ll be returning there to crowdfund my company’s next product, and I couldn’t be more excited about the launch. After so many lessons learned, I’m anticipating a much more enjoyable, though equally as life-exploding ride.
Gareth Everard is a cofounder at Rockwell Razors, a startup that designs and manufactures traditional shaving products.
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