Fake it ‘til you make it: Harnessing Kickstarter for growth
Salt Lake City-based Ravean (or, if you prefer, the Ravean Heated Jackets Project) makes heated outdoor wear. The company started from scratch and will clear “between three and five million” for the 2016 calendar year, according to co-founder Bryce Fisher. Its first product, a 150-gram jacket, raised a total of $1.3 million over the course of its Kickstarter campaign. Its Kickstarter goal had been $100,000.
Ravean’s latest product, an ultralight variation on the 150-gram jacket, had been live for 10 hours as of my phone call with Fisher. “It’s already done $70,000,” he tells me. Clearly, Ravean is on to something.
“We’ve created a pretty efficient template for launching products on Kickstarter,” Fisher says. “It’s worked every time so far.” So well, in fact, that Fisher and his team found themselves deluged with questions from other entrepreneurs. How, their inquirers wanted to know, had the RHJP team managed to harness the power of Kickstarter to create a multimillion-dollar business?
“Kickstarter’s great,” says Fisher, “because it allows for a full product launch with very little upfront cost.” No inventory investment. No need to risk large sums for manufacturing, unsure of whether the product will sell. Ravean Heated Jackets Project particularly stands out from other Kickstarter users, however, due to its pre-Kickstarter protocol.
According to Fisher, “each product is thoroughly customer validated before it ever reaches Kickstarter.” RHJP prefers risk avoidance; pre-launch validation all but guarantees success. Ravean’s validation system involves three steps.
The fake website
All three of the steps occur inside a website—“fake,” Fisher calls it, though the site itself is real enough—that Ravean builds for a putative product. After developing a prototype, Ravean creates a stylish site complete with full-page sliders, product photos, models modeling the product and perhaps video as well.
“Our photographers and video production folks work on a contingency basis,” Fisher tells me. They’ve seen our launch success rate”—100 percent—“so they don’t have a problem with it.” Essentially, Ravean’s upfront cost totals that of the prototype and the website, the latter of which is easily replicable from one product validation to the next.
With a live site, the team uses Google pay-per-click advertising, social media ads and other forms of online targeting to drive traffic to the page. This is where the three steps begin.
In the first step, customers click on an ad of some sort and land on the site. Or, to be precise, the first level of the site. There, they see marketing info on the product: specs, reviews, the photos and video—the lifestyle enhancement, flashy sales-y stuff. The page features a “Learn More” button. If a viewer clicks the button, they enter the second phase.
The second layer, if you will, of the customer experience occurs when the website visitor clicks through to a page that offers more product information. Also, a “Buy Now” button. When they click the button, they have unwittingly served as a free product validator for Ravean.
The anticlimactic third page merely informs the customer that the product is out of stock and asks them to check back later.
On each of the three webpages, the RHJP folks place tracking pixels. These monitor the behavior of website visitors. For instance, if a person clicks “Learn More” on the first page, views the second page, then leaves the site without clicking “Buy Now,” the team will see the entire journey: how long she viewed the first page before clicking, how long she remained on the second page before leaving the site, etc.
All of these behavioral insights are valuable, but the team really wants a single metric: what percentage of website visitors clicked all the way through to view the final “out-of-stock” page? Each of these count as a single instance of product validation. If a customer has sufficient interest to click through three layers of information and then take action to buy, that customer has demonstrated market viability on a small scale. If hundreds of people do the same, and if the proportion of them is much greater than those who drop off, demand for the product has been conclusively demonstrated.
“If we’re seeing 80, 90 percent validation,” Fisher says, “we consider that a success. If it’s very much lower than that, we’re not going to invest the time and energy needed for a Kickstarter campaign.”
The Ravean three-step customer validation process is one of many “modules” that comprise its “Ultimate Kickstarter Success Course.” The team’s educational arm, Seven Figure Funding, promises to take noobs with “no technical, marketing, or computer expertise” and teach them the entire process involved in launching a product. Starting with “Setting Up Your Marketing Validation Funnel,” through “Designing Your Kickstarter Campaign Page,” to “What Marketing Firms We Recommend & When to Engage Them,” and beyond.
Kickstarter has been around for some seven years now, which, in the software world, makes it old news. However, Bryce Fisher and his Ravean comrades have co-opted it in a somewhat novel fashion. Where most view it as a, well, kickstart to get their product off the ground, the team harnesses it as an integral part of their business model. And they’ve done it so well that others are now paying them to teach them how to do the same.