Kickstarter & the Amazon Startup Program
Last year, Amazon announced a new program designated for successful startups, Amazon Launchpad. The objective of the program is to make it easier for startups to launch, market and distribute their products to millions of customers across the Amazon Marketplace.
One year later, Amazon followed up with an official partnership with one of the most prominent crowdfunding platforms to date, Kickstarter.
According to the announcement, the Amazon “Kickstarter Collection” aims to sell more than 300 crowdfunded products via Amazon Launchpad.
“I’m not sure the portal itself will help to increase visibility to the products within it, since those products will surface for a regular search on Amazon.com,” Pat Petriello, Senior Marketplace Manager at CPC Strategy said.
“However, the Launchpad for Kickstarter ecosystem could become a powerful marketing tool for Amazon to use to convince other new and innovative products to get on board.”
“From Amazon’s point of view, making sure they are intentional about adding new and fresh product selection protects against a scenario where selection becomes stale.”
While the Amazon startup program continues to gain awareness on the Marketplace, many entrepreneurs are still wary if Amazon’s latest program is a viable channel to distribute their product(s) on.
We spoke with Joe Moreno, mentor of the San Diego Kickstarter and Inventor’s Club at 3rd Space, a creative coworking space located in San Diego to find out his thoughts on the evolution of crowdfunding and how Amazon plays a role in the success of startup brands.
About Moreno: Moreno is a former Apple engineer, product manager, high tech startup founder, and occasional speaker, author, and journalist on technology, business, and marketing.
Q. How did you become involved with 3rd Space and the Kickstarter Group?
A.“I spent most of my career at Apple as an engineer. From there, I started working with Guy Kawasaki – a former Apple employee who worked directly with Steve Jobs and founded Garage.com,” he said.
“Working with Kawasaki was a great opportunity, especially for the company. For the past few years, I’ve been mentoring and that is when I founded the Kickstarter Group.”
“What makes 3rd Space unique is that it’s not just another coworking office space – it’s a focused coworking club for the creative type. It’s not just a dedicated desk or shared space – the focus is on creative designers, photographers, copywriters, and all types from a creative background – so they share in that common link.”
3rd Space started out with a monthly Kickstarter meetup group open to the public. As seen in the picture below, each week participants gathered to discuss the crowdfunding ecosystem with a variety of featured speakers.
“What we discovered was that the ‘build it and they will come’ mentality does not always work – especially if you haven’t done your pre-launch marketing.”
“We were learning so much from the monthly startup meetups that it eventually evolved into weekly sync ups called the ‘Inventor’s Club’ (now called the Mastermind Group) – where a group of entrepreneurs gather to discuss their soon to be Kickstarter launch.”
According to Moreno, the main objective of the group is to help new product launches “discover what they are missing” in their Kickstarter campaign and development / encourage “more interaction among entrepreneurs”.
To date, 3rd Space has raised almost 1 million between all their crowdfunded projects.
“What’s interesting is there’s not necessarily a common theme – one couple from San Diego invented an [industrial] garbage fly trap, another creative founded an online comic book, one guy branded JetComfy, a travel pillow that clips onto the plane armrest.”
“One of our most successful fundraisers was The Undress. The founders were featured on Good Morning America for creating a dress that women can use to change their clothes in public.”
Q. How has the landscape of crowdsourcing / crowdfunding shifted?
A. “Crowdsourcing has been around for the past 100 years. You could consider war bonds during WWI a form of crowdsourcing, but recently, crowdsourcing has shifted in dynamic for consumer goods – especially for consumer products to market.”
According to Forbes, just five years ago there was a relatively small market of early adopters crowdfunding online to a reported $880 million in 2010. Fast forward to 2014, where we saw $16 billion and almost 34 billion in 2015 in crowdfunding.
According to Moreno, traditionally the timeline of the product development process includes – a prototype is made, manufactured, marketed and then finally sold.
But Kickstarters (and other crowdfunding platforms) switch those two middle steps. Before a company manufactures – they market the product via a presale of the products. Then after the marketing they can manufacture and sell it.
“What this does is it shifts the risk from the entrepreneur to the customer over a potential market,” he said. “Kickstarter helps entrepreneurs test their market before they actually manufacturer.”
Q. Why it is so difficult for entrepreneurs to succeed as the “inventor” & the “marketer” of their product?
A. “What we do is we take the makers and we turn them into marketers,” Moreno said. “We expose them to a lot of different marketing options and then they figure out what works best for their product.”
The hope is that the mastermind group will help entrepreneurs look beyond the standard logistics of running a campaign and develop a holistic view of their product development and marketing strategy.
For example, one question they ask startups is: “How can you use Facebook advertising to promote your product before you launch your campaign?”
According to Moreno, Facebook ads can help startups narrow down their demographic but in general entrepreneurs should experiment and market their product(s) across a variety of channels including but not limited to Facebook, Instagram, Twitter, Amazon and Google advertising.
If you isolate your strategy to just Facebook marketing – you could ultimately miss segments of your target audience – which could be spending more time on Twitter.
Another common mistake many “inventors” make (especially among video advertising on Kickstarter) is when they lead with their product’s best features rather than addressing a problem for their target market.
For example, a 2 minute Kickstarter video advertisement should spend 30 secs addressing a problem, another 30 seconds explaining the product’s beenfits, 45 seconds highlighting the product features, and the final 15 seconds on pricing.
Q. What common traits do you see among successful startups today?
A. “Successful entrepreneurs don’t see setbacks as bad, they see it as an opportunity and this when the real work can be done.”
According to Moreno, it’s likely you will hit more than few bumps in the road throughout the product development and marketing process including manufacturer complications or packaging issues.
As for Amazon startup programs such as Launchpad or the Kickstarter Collection, Moreno encourages successful Kickstarters to take advantage of these new and upcoming opportunities.
“I think that Kickstarter’s ecosystem can reflect in some ways how well a product will perform on the Amazon Marketplace.”
Q. What can we expect from 3rd Space in the future?
A. Every year 3rdspace hosts a Kickstarter Demo Day highlighting product based innovation in San Diego. Demo Day is an event where local San Diego Inventors and Innovators showcase their products to the public. The event also features some of their Kickstarter Veterans who have launched successful products on Kickstarter and are now running successful businesses.
This year, 3rdspace’s Inventors Club Demo Day will be held on Saturday Aug. 13th 7pm at 3RDSPACE, Club for the Creative located at: 4610 Park Blvd, San Diego, CA 92116. For more information visit, 3rdspace.co