EPISODE 57 OF THE MARKETING SOLUTIONS PODCAST: HOW TO RUN A SUCCESSFUL CROWDFUNDING CAMPAIGN
Sonya McIntyre-Reid:
If you've just seen this episode title about crowd funding, I'm sure a lot of you would have been put off and maybe skip straight over it. Please don't. This episode is so valuable for anyone that is starting out in business. We talk all about leveraging your network, how to set up effective marketing campaigns, and the pieces that need to be in place before you actually go and invest in that. Shannon from Pronto Bottle has so much knowledge, and it has been incredible to see how she's grown over the past few years, as part of the One Roof community that I'm a part of. Honestly, I think this might be my favorite interview of all time. Welcome to the Boom Your Biz podcast, a podcast for the movers, the shakers, and even bigger action takers in business. I'm your host, Sonya McIntyre-Reid, and each week, I'll be exploring the question of what really makes businesses and organizations thrive. I'm on a mission to educate, empower, and inspire business owners and myself along the way.
Today, I'm joined by Shannon, who has just been through some amazing crowdsourcing fundraising. And this is a world that I honestly know very, very little about. So, Shannon is part of my incredible One Roof community, and I just had to get her on the episode to ask some probably really basic questions, but I know that there's a lot of people out there that have an amazing idea, but just can't get it off the ground, or don't know how to start. So, Shannon, welcome. Thank you so much for coming and having a chat with me.
Shannon:
Thank you very much for having me on.
Sonya McIntyre-Reid:
Okay. So, let's maybe start with, what is your story and your background? Where have you been to then get to the point that you go, "Right, I've got this product idea, and I'm going to raise money and get it happening?"
Shannon:
It's a bit of a long-winded story, but I'll try and make it as short as possible. My original background actually wasn't in product development, it was in a different area. It was actually within the games and mobile application area. So, my original studies were there. Fast forward a few years of doing indie games and then into working for a large games company, and then I went and studied entrepreneurship and innovation. So, that was where all of this started. And my brain tends to think this way anyway, I'm very much a problem solver. So, once I finished the studies, and then I wound up pregnant and I had my daughter, and got into that whole bottle feeding process, it was pretty natural for me to go, "This is ridiculous. How am I going to solve this?" That's how it came about.
Sonya McIntyre-Reid:
Oh, fantastic. Okay. So, for those people that don't know, and I don't have a baby, and I think your whole marketing process was amazing, because it actually educated me a lot. What problem have you solved for moms that are bottle feeding?
Shannon:
Well, it's actually moms and dads. I think people forget now that-
Sonya McIntyre-Reid:
Of course.
Shannon:
Dads are going through this experience too. And it's the issue of, that when you're going and you decide to go through the bottle feeding process, you generally buying five or six bottles. You're having to then wash those bottles. You have to sterilize them. You have to pre-fill them, pre-sterilize the water that actually goes into the bottles, and then you're carrying all of those prefilled bottles with you in your nappy bag. So, it's two kilos worth of weight, if you've got six bottles with you. That's crazy, right? And the time, the process actually takes an hour a day. So, it's half an hour in the morning, and usually half an hour in the evening, because you'll do five or six bottles pre-prepped for that 12 hours. And then you'll do the same process before you're going to bed and getting ready for that nighttime feeding session. So, it's an hour that people are actually going through this process.
Sonya McIntyre-Reid:
Oh, gosh.
Shannon:
It's crazy. Yeah. So, when we developed Pronto, I actually had a different idea in mind, but bring on the studies that I did, I went and actually investigated what the problem was for parents. And I just said, "Look, how are you traveling with your baby?" And I did that in cafes and in libraries, so I can actually see what people were experiencing at the same time. And the biggest pain points were, yeah, the time that they were wasting in this process. It was the time, the weight, the cumbersome nature. And also I used to have a bad habit of running out of bottles when I was traveling, so for me, I was solving that problem at the same time. And so, I just went and research, when I had the inflammation, I went and researched the ultimate idea.
Was it possible to travel with a bottle, just one, and could you do it with it being empty? So, that was my idea. That was my, you talk about blue skies, how big could you go and crazy with this? And that was it. And I actually went and researched then technology that could sterilize a bottle, that could actually sterilize water at the same time, and then found UVC light and how it was being used in the medical field. It was being used in the dental field to sterilize surgical equipment, and it was also being used to sterilize water. So, public plants that sterilize water for communities are actually using UVC to sterilize that water. So, we basically integrated that technology into a baby bottle.
Sonya McIntyre-Reid:
That's amazing. Okay. So, you've got this incredible idea. You know there's a serious pain point there. What's next?
Shannon:
The next thing is actually getting it off the ground and getting it developed. So, going through the process of obviously having it designed. So, my background was in animation prior, so I could actually do the initial designs and that myself, but then bringing on a design team that could take that further. And working with them, actually developing a company as well at the same time. So, actually building a company at the same time as we're building the product. The key thing there was then actually finding mentorship, funds, and just support going through that. So, building the network of people around me at the same time to not only support me, but to support the company and what we were trying to do with Pronto. The key thing there is, like most entrepreneurs try to do, and why it's so coveted, is actually getting into an acceleration program. And those accelerators give you those three key things, mentorship, information, networks, and funds. That's four, not three.
Sonya McIntyre-Reid:
So, how did you go about finding one of these accelerator programs, and what were the requirements to actually get into one?
Shannon:
There was, I've probably applied for seven or eight acceleration programs so far. I've been accepted into three so far. Two of them, I actually went through and accepted myself and went through the programs, and it was basically just either somebody recommended the program to me, or I actually did some research as well. So, I looked at what acceleration programs were available, looked at the types of equity that they took in the company for the acceleration, and the mentorship, and sometimes the funds as well. And then also looked at what the reviews were, and what resources they provided. Because some of the acceleration program said, "We'll put in, let's say, $120,000 worth of assets into your company." And that doesn't mean it's just funds. So, some of those assets could be, "Here's $50,000 worth of services," but some of those services you wouldn't even need because, for me as a hardware startup, there were selling things that were really SAS based.
I don't need AWS resources. You know what I mean? It just doesn't make sense to my business. And so, those were things that I looked at and weighed out, which were the best ones for me. And also looking at what access to networks they gave me. That's why when I came across the MedTech acceleration program, it was perfect for me because it was seen as a med product, a healthcare product. It was definitely hardware based, so they were dealing with hardware, other hardware medical products. And it was the first one that I'd come across that was actually focused on hardware. That was something you don't really come across very often. Yeah.
Sonya McIntyre-Reid:
Oh, that's amazing. What is the start up scene and support like in Australia, versus somewhere like America?
Shannon:
I think it depends on where you are. So, I find Melbourne is very startup focused. It's very supportive. The network here, Startup Victoria, the other groups that are around, there's just so much here that I found a lot of support for startups. It was difficult for a hardware startup is the thing that I found, because not a lot of people are doing it. It's a very difficult thing to do because it's financially intensive, and it requires a lot of energy and people and support around you to actually get the product developed. So, it's hard to pitch for, in terms of getting funding as well, but the ecosystem here is amazing. Compared to the US, I don't know, I've never been in the US, but there seems to be, I think it's a geographical thing because there's lots of companies, there's lots of support. There's lots of finances, lots of acceleration programs. I think it's just a matter of how many people actually in the country. That's probably a really weird way of answering that.
Sonya McIntyre-Reid:
No, no, that makes sense, though. So, once you entered these acceleration programs, you had your product designed, mapped out and everything, what happened in regard to your marketing? So, how did you start gaining interest and traction, and how did you build that to the point that you launched this crowdfunding campaign?
Shannon:
I probably went around it in the most expensive way you could ever think to try and market a product, and it wasn't my intention at the time. But we actually ran a crowdfunding campaign in the end of 2019, and that was through something like Kickstarter. We actually did it on Indiegogo. And the idea there was to raise the funds we could actually get to tooling and manufacturing our product. What we didn't realize at the time of doing that though, was just how important brand was to parents actually purchasing a product, and making a decision whether they were going to give their baby a new product they hadn't come across before. There was some other issues in terms of purchase decision cycle as well. So, when somebody decides to bottle feed, they need the bottle straight away, and not in nine months when you've done your manufacturing. Do you know what I mean?
So, wasn't really going to work. But because of that, we ran a lot of PR and a lot of marketing for that campaign, so that built up a lot of visibility. So, we had a lot of articles, and interviews, and stuff online. And then following on, we continued that into the new year, but we continued that in a very soft approach. So, we went through and just did things like blogs, and just your typical LinkedIn posts, and cross sharing into other parenting blogs and articles. And then it ramped up again.
So, going into the crowdfunding, this, no, 2020, it was the same process, but we got PR involved. So, PR companies involved, and then they were doing interviews requests that we did, and articles again, and then also the marketing team we were working with were doing advertising as well. So, we're working with a company called [Harvey Bennett 00:10:56], and they did marketing for us for the campaign. And yeah, it just went from there, and it all went through LinkedIn and stuff, as well. We also leveraged our networks quite heavily too, going into that campaign as well.
Sonya McIntyre-Reid:
Fantastic. So, in 2019, how much did you manage to raise with the crowdfunding?
Shannon:
Oh, this is the shameful part. We only raised about two grand.
Sonya McIntyre-Reid:
But I feel like you've gone back and identified why that was, in terms of brand, and product life cycle, all of that stuff. And then I think this is the amazing part. 12 months down the track, you've nailed those bits and pieces, you're 12 months down your journey, what did you raise in 2020?
Shannon:
We actually managed to raise $105,000 this time.
Sonya McIntyre-Reid:
Amazing. And I feel like your launch for that was everywhere. I was seeing it all the time, everywhere. It was fantastic. So, on the week of the launch, it's coming to crunch time, what were you doing? Are there specific things with crowdfunding algorithms, or whatever you need to make sure you're getting a lot of traction really quickly? How does that work? What did you learn?
Shannon:
We planned, obviously, we were planning a month in advance. So, we were working with the marketing team a month in advance as to what we would be doing, and when we would be doing it. And a portion of that was me rewarming my network, so actually spending time on social media through Instagram, and Facebook, and LinkedIn, actually commenting on people's posts, but also reaching out to my network that I had in terms of, "Hey, do you mind if you feature us in your newsletter? Could you put us out when we're, at launch time, could you comment on this?" So, we were heavily behind the scenes doing that, pre-prepping people as to what we were about to do.
And then on the actual launch day, obviously, we then emailed people out to, "Look, we're about to launch. Let's get involved, get commenting, get sharing." And it was just basically leveraging the network, and then also obviously the marketing. So, we then started running our ads, and then, yeah, just the articles as well. So, PR started coming out as well, as PR requests for articles, and interviews, and that kind of thing too. But it was a lot of planning. Yeah.
Sonya McIntyre-Reid:
And I think what you've done really well is that you haven't just focused on one channel. I think sometimes go, "Well, I'm just going to do Facebook ads" or "I'm just going to focus on Instagram." You're pulling in all different channels to do that, and also leveraging your networks. So, when you say that you're running ads or Harvey was running ads, is it just social media ads, Facebook and Instagram?
Shannon:
Yes. So, it was just those three channels. We did some testing later on, but this is the other thing. So, we didn't just run them and then leave them. The whole time we were concerned about whether or not, we didn't know quite whether it would be parents that would be the investors or the main investors in our product, or whether it would be more sophisticated people, so business people that would be involved. So, we knew we'd have to be testing the whole time, seeing what the results were, and then adjusting our advertising strategies as well. So, when we started advertising on Facebook, we were adjusting the target demographics at the time, seeing what the response rates were.
Virtual was very involved in this as well, so virtual on their end. They would basically run ads concurrently, and it was either they were filling the top of the funnel and then we were hitting the warm contacts and then taking them from there through social media, or it was the other way around. We just had a look at who was performing better. And then for the professional network, we actually did some testing in terms of advertising through LinkedIn as well. But the advertising on LinkedIn didn't go that well, but leveraging the networks, and actually speaking to people through our networks worked exceptionally well. I think 60% or 70% of our investors were either personal contacts or throughout our LinkedIn professional networks. It was amazing.
Sonya McIntyre-Reid:
Yeah. Wow. Isn't that incredible? And I think, I found that I just won't run LinkedIn campaigns for our clients, because I've never had any success with it. But again, leveraging those networks, it's always worked really well. So, you mentioned just before we started recording, so that round of crowd funding is done now. Now you're looking at another type of funding. Can you talk to me a little bit about that?
Shannon:
Totally. So, when we ran the virtual campaign, ideally what we need to do is get ourselves, obviously, to tooling and manufacturing. So, we're getting the product into somebody's hands. The issue is that that's an expensive raise, it's $850,000, but we knew we wouldn't be able to get that through virtual. So, for virtual, we put our minimum raise at $175,000. And at the same time, we started raising privately through wholesale investor networks. And we weren't advertising in Australia though, because we'd already spent the last eight months trying to raise funds through the Australian investor ecosystem.
And we found that just investors here just weren't interested. They were quite risk-adverse here. So, we advertised internationally. So, US, UK, Asia, and we started leveraging those networks and developing those relationships. So, while we were running virtual, we knew we'd get ourselves to the basics of prototyping, testing, and possibly tooling as well, so we could do a small batch run of products. And at the same time, we knew that within six to seven months time, we would need that bigger raise to actually be able to do full productions. So, this gave us a longer timeline to be able to do that bigger raise, which is now a $650,000 or $670,000. Yeah.
Sonya McIntyre-Reid:
Wow. Again, this is just a completely different world. How do you tap into those networks and those investors? Where do you even start?
Shannon:
That's a really good question. I actually don't know how I got here, if that makes sense. It's from research. One thing is research the heck out of everything, like I do. And then we came across a wholesale investor website. We came across other people that we've been in communications with. Also my board members as well. So, we brought on a board at the same time as doing all of this. So, they had people within their network that they could introduce us to that were either brokers that we had conversations with, or possible investors, or people that they knew overseas.
And also, again, my LinkedIn contacts. So, people saw that I was doing a raise, and they said, "Hey, are you looking for a larger raise portion? What is that looking like?" And I had a conversation with them like, "Great. I can actually have this conversation with you because I've got investors that I know that are in the US." So, again, it was a portion of us researching what's available and also our networks. So, because of the PR and the marketing, people seeing the campaign, it was suddenly like, it just opened up everything. People knew what we were trying to do, and then they started coming in and having conversations with us. Yeah.
Sonya McIntyre-Reid:
Isn't that fantastic? So, I feel like with your crowdfunding side of things, yeah, you've hit your $190,000 target, but you know that's not enough to fund everything. But what it's done for brand awareness, and showing people that you're moving, and you're shaking, and you're getting it happening, has been huge.
Shannon:
Massively so. And I think this is one of the things that I find that some startups forget, is that the networking portion of being a startup is so, so important, and getting yourself out there. And that's what, when we're in the physical space, when we can be together and do physical pitch events, that's really what pitch events were about. For me, it wasn't just about, can I win a pitch event? It was about the networking aspect. So, every time I go to a pitch event, give it another month or two months down the track. I know that investors are they're watching at the same time, and they can start to see that I'm progressing. I'm not just in the same point. I'm not just in the same spot.
And it's the same with doing a crowdfunding campaign. Although it's a very expensive raise, these raises costs anywhere from $30,000, to $40,000, or $50,000, depending on the size that you're raising. It's 10% to 20% of the funds that you're raising, you will spend on your marketing, your PR, to actually get a campaign going. So, it's not cheap, but the [knock-on 00:18:31] effect of that, of the brand awareness, the company awareness, founder awareness, you can't put a price on it, really.
Sonya McIntyre-Reid:
Yeah. And again, I think this goes back to, you're not just relying on one channel. You've got a plan, you're constantly progressing, and you know that things are going to keep building. So, it's not just about that initial money that you've raised, or your expenses associated with that. It builds momentum. And I think even when you're not doing product development, if you're just starting out in new business, that is so important to look at it that way. So, if there was someone listening today that has an idea for a great product, and they're just going, "I don't even know where to start," what's that first baby step, just to get the ball rolling? What would you recommend?
Shannon:
Honestly, the baby step is building a network. The biggest and most important thing that I did actually was I wound up pitching, randomly actually wound up winning the pitch. And I gained access to One Roof, which was the co-working space. And from there, it was meeting people like Sheree, who are amazing entrepreneurs in their own right. And then meeting the people that were within that network, that then became people that I started doing my marketing with, and people that I chose as my legal team. And it was just the network access to that. And it was from that, that people were then giving me information. "Hey, have you checked out this acceleration program? Have you seen these people? Have you spoken to this company about X, Y, and Z?" And that is just the resource of information available to you really opens up when you've got a larger network. Yeah.
Sonya McIntyre-Reid:
Oh, I love that.\, and it's so true. I think for my business as well, the One Roof network has just been absolutely incredible. And the amount that we've grown over the last two or three years, as a result, and the support I feel is just, I think Sheree has done such a great job of just building this community.
Shannon:
Yeah, 100%. I sound like such a fan girl.
Sonya McIntyre-Reid:
Oh, so do I. But yeah, I don't know. I just, I have not come across something else like this. I think a lot of people have attempted to do something similar, but I remember coming home one day and just sitting there and going, "I found my people." And it's a nice feeling, because I think sometimes when you're in business and you're trying to do big things, a lot of people around you don't get it. So, that feeling of, I found my people, is just, it's really nice.
Shannon:
Yeah. And I think, and it's probably difficult now because I don't know if co-working spaces have opened up or not. I feel like I'm huddled in my little private space at the moment. I haven't really moved for a bit. But I think getting out there, getting involved in co-working spaces, getting access to other people, just opening yourself up to communications, to having conversations, makes a huge difference. And the support, like you said, you nailed it on the head. Supporting yourself mentally and emotionally through this as well, because it is so difficult being a founder, whether you're a solo founder, or if you've got co-founders helping you through, it's a hard game.
And it's whether you're doing a hardware startup, or whether you're doing a marketing company, or a legal team, whatever it is, it's hard doing that stuff by yourself, and you shouldn't have to do it by yourself. And I think that's why it's so important to build those networks, access them. And not only, obviously, leverage them for helping your business, but also supporting them back. I get a great deal of love for doing this stuff, now being able to help other founders when they're going through this process.
Sonya McIntyre-Reid:
Yeah. I just love it. Yeah. It's such a great community. And I think your message, no matter what business you are about, finding a support network and building your connections is so, so important. So, if we wanted to go and support you in some way, how could we do that, and Pronto Bottle?
Shannon:
Probably the biggest thing is if you want to, feel free to sign up to our newsletter that's on prontobottle.com, or just follow us on LinkedIn. That's the biggest thing. We tend to post articles quite often, or follow me, one of the two. And yeah, if you need any help about fundraising or some guidance and feedback, just reach out. I'm more than happy to have a conversation, help you with anything.
Sonya McIntyre-Reid:
Awesome. What I will do is I'll pop in the show notes links to your LinkedIn account, Pronto Bottle, everything. People can go and check it out. And I think even going into seeing your marketing communication and that journey scrolling right back through your feed as well would be a fantastic exercise to do. And I'll go check that out.
Shannon:
Everyone's totally sick of seeing me by now.
Sonya McIntyre-Reid:
No. That means it's working.
Shannon:
That's awesome.
Sonya McIntyre-Reid:
Well, thank you so much for your time, Shannon. Really appreciate it.
(silence)