It’s often hard to share the ins and outs of being a hardware company but I like talking about process, it dedramatises the whole thing for others who might be thinking about starting a product company.
That’s why I’ve decided to write about why we’ve decided not to go ahead with our Indiegogo campaign for our ‘Made in USA’ product.
When I got started with Good Night Lamp in earnest in 2012, I ended up running a Kickstarter campaign in parallel to a presence at CES. Perhaps a bit too pedantically, I was looking to raise what I thought was the right amount of money to make our first batch. That desire for transparency meant we published our whole budget and shared it as a financial tool for others to use. We didnt’t manage to raise enough to go ahead and at the time campaigns couldn’t be paused so we raised £43K but as an ‘all or nothing’ process we didn’t get any of it. So I bided my time and in autumn 2014 we opened pre-orders for a limited batch of 200 lamps. We made them and delivered them in April 2015. Not too shabby for connected hardware when most take around a year or so.
In early 2017 we started to talk to some people about doing a crowdfunding campaign again.
The great thing about running a company is that you meet fantastic people who have deep understanding and talent and want to help you be successful. For every no you get, you also get a lot of yeses and Anastasia Emmanuel is one of those yes people. She very kindly chatted to us about how we could make a successful campaign and we thought: why not look at this again?
We were in the early stages of redesigning the technology inside the lamps to accomodate a disastrous change in technology that was happening across the pond: US mobile networks were switching off 2G (the core technology that helps our lamps connect). That’s when the spreadsheets started. We used bits of information shared by others and what we could find online. We knew we would have to do all the promotional work before Indiegogo were able to help us out (we would be in charge of the crucial first 2 weeks) with a mention on their newsletter. Our Kickstarter campaign taught us that most of our backers didn’t come from them including us in their promotion: it came from our hard work going to CES, raising awareness, reaching out to media. We also knew that most campaign backers don’t like to spend much money because it’s usually something of a gamble, a hypothetical. Companies can often take many years to deliver to their backers and unfortunately many never get there (especially in the world of connected products).
To further prepare for a campaign we also looked at our costs and the costs of manufacturing our first product which we did at a small loss. This is how the product costs break down for a set which we sold for £279:
- 50.17% on the enclosure
- 32.25% on the electronics and the data provision
- 6.45% on the LED panels
- 2.1% on accessories
- The rest went to packaging and shipping costs, e-commerce (2.9% + $0.3) and payment gateway fees (1.9%-2.9% +£0.2)
We invested in working with the amazing EPS who deal with assembly and logistics and Laura joined our team, working remotely from Italy supporting our customers. We also built a great management tool with Tom Armitage and we learnt a lot by working with our customers through the various issues we discovered.
So we’ve invested a lot and know people know us and trust us to we deliver a high end product and good service.
We started asking ourselves an important question: why work really hard to drive attention to a campaign and a platform that will take a significant part (5%) of our already limited budget.
We have already worked with a small set of really awesome customers to make our first product, why wouldn’t we do the same again for our ‘Made in USA’ product? We’re not new at this, we’re not unsure of the process. And people know us and like us.
So we decided that instead of taking a gamble on crowdfunding we would just do what we do best which is make a small batch of 200 Sets of lamps in 2018 for US & Canadian customers.
They will be available to order on Cyber Monday will be ‘Made in USA’. We’ll be making them in Tennessee and Alabama.
We aim to ship those orders by June 2018, hopefully even in time for US Mother’s day.
We’re excited and we hope it’s a gamble that will pay off. We like to think that this approach is more careful and we’ll in return be able to take care of our customers, who usually buy a Good Night Lamp because they want to take care of a loved one.
Please share this news with your North American friends and families and see you on November 27th!