Cheesy but true: Chris Peters’ bio seems almost perfectly designed for entrepreneurial success.
According to Chris, he…
- Studied Industrial Design right out of high school.
- Spent 4 years working at a large firm that specialized in medical machines. He was involved in industrial design work, prototyping and graphic interfaces.
- Then worked at various design consultancies.
- Took a year off to wakeboard. (Always cool.)
- Worked for a much smaller design consultancy, which helped him get a sense of what it’s like to run a small business.
- Sold software for a year to learn how to do sales.
- Ran his own design consultancy for 3 years.
That adds up to over a decade of experience before he even got started on Opena Case and Annex products! His cofounder Rob Ward also had a technical background, doing sales and marketing for a firm that sold laser cutting machines.
If nothing else, I think that’s a sobering reminder that “overnight successes” can take decades to develop.
The Opena Case Story: Rapid Prototyping -> Insane interest from friends -> Built a FB community -> Kickstarter Success -> Media and PR attention -> Win.
The bulk of the following is from Chris’s incredibly extensive interview with Yaro Starak, who runs Entrepreneur Journeys. Chris has a lot of interesting thoughts about prototyping and manufacturing, but I’ll leave them out of this post to focus on the customer acquisition bits.
“Wow, if guys are willing to pay a couple hundred dollars for a product that’s just a prototype, this thing has really got some legs.”
“Field reports” are powerful:
Every time we’d go out to a friend’s barbecue or party, we’d have them with us and we’d pull them out and crack open the beers.[…]
The reaction we got from our friends was incredible. It was just instant: “Whoa, what was that? Did you just open a beer with your phone? What is that thing?”
It was the type of product you’d show people and they’d love it straight out no matter who they were. And then, you’d go to put the product away or put it back on your pocket and they’d be like, “I want to buy one.” I’d be like, “It’s just a prototype. It’s not a real product yet.”
“I want to buy the prototype.”
“Well, prototype is not really for sale.”
“Well, how much did it cost?”
And, you’d explain how much it’d cost– Prototypes aren’t that cheap but, when you say, it’s cost us a couple of $300 per prototype, they’d be like, “All right, I’ll buy it off you.” It’s not for sale, guys. These are just prototypes. [Laughs]
So, that guy gave us a lot of confidence to actually get that thing out in the market and kind of made us fast track it to get up on Kickstarter.
When you’re starting a business, it makes sense to stay at this stage and iterate and iterate until you get this sort of feedback from potential customers.
This is the equivalent of getting a high Net Promoter Score– when people say they’d be upset or disappointed if they can’t use your product.
“We did some pretty smart things before we jumped onto Kickstarter.”
As Kickstarter was fairly new, we knew we had to drive a lot of traffic to our Kickstarter project to get people backing the project. So we thought we’d build up a bit of a community before we would actually launch the project. If you’ve read the Seth Godin book on Tribes — it’s all about building a community and getting them to be writing fans about your products.”
Early adopters exist, and they love to be ahead of the trends. It makes a lot of sense to seek them out, because they provide the social proof that the early majority will need.
“We set up a Facebook page.”
Very simple. Just threw the idea up there, threw up a couple of renderings, photos and maybe a couple of videos and prototype testing. Then we got all our friends to jump on board and like it and share it around. We even set up a Facebook ad. We ended up having about 1,000 likes on the Facebook page which cost us maybe $100 or $200 worth of ads.”
Tell the story of your product, and make it easy for early adopters to tell their friends about you.
“We got people’s feedback.”
So, we basically did a bit of research before we even jumped on Kickstarter. We asked them what they liked in design, what colors they’re interested in, things like that. We had a bunch of people who were just waiting for this thing to get produced even before it was in Kickstarter.”
That’s golden. You want every bit of unfair advantage you can get.
Early-bird rewards got ‘massive amount of traffic’ and increased word-of-mouth sales:
“When we launched on Kickstarter, we repaid the favor to these people for helping us spread the word. So, we had an early bird backer rewards. A standard award for an offer for Opena case was $30. We opened it up to early-bird backers for half price, almost $15. We had a very limited number of those rewards, about 150 of them.
“As soon as we launched on Kickstarter, we shared it on Facebook page saying, “Yes, it’s now on Kickstarter. You can basically jump on board and put your money where your mouth is and help make this product a reality.” Those early bird backers sold out within half an hour. They just went like hotcakes. Everyone emailed that link to all their friends saying, “Check this out. If you get in early, you’ll get a really good discount.
“It got us a massive amount of traffic in the first few hours that it was launched. It really helped boost that campaign.”
Rewarding your early adopters is critical. New brands aren’t very visible or well-known, so they can only survive if their early adopters are disproportionately excited.
Today, Opena Case is just one of several products in the Annex Products family.
You can’t be mad at this—>Fancy – Opena Case iPhone 4 Bottle Opener http://t.co/l4Po2kR
— ashton kutcher (@aplusk) July 15, 2011
And I’m sure Chris and Rob have plans for more.
Update! I got to ask Chris a few questions of my own:
1: Do you have an overall framework for thinking about customer acquisition? How did you build your personal marketing chops?
“Customer acquisition is something that we are always working on and getting better at as we go. The majority of our customers are acquired online, and the greatest thing about selling online is that you can test your theories and get instant feedback on what works and what doesn’t.
Lately we’ve been focusing our efforts on video content and Facebook marketing.
Video marketing: Our product is difficult to explain in a short sentence but super easy to show in seconds with a video, so its a very effective method for us.
Facebook marketing: We funnel customers from Facebook marketing directly to a specific product page, and try to convert them in the first visit. Our fall-back option is getting them to sign up to our email list in exchange for a small discount on their first order. Building our email list has been very important for re-marketing in the future.
We have a very high percentage of repeat customers which we put down to two reasons:
- Users find new use-case: Our product is a system, and once people start using it they become so invested in the benefits it provides that they start looking for other ways they can integrate Quad Lock into their life. This usually results in them purchasing more mounts.
- Cyclic demand: People upgrade their smartphone handsets every 12-24 months so every time a new iPhone model is released we make a case for it and re-market to our existing customer base.”
2: Is there anything counter-intuitive or surprising about your experience acquiring customers? What were you wrong about?
“We haven’t come across anything counter-intuitive but we always approach things we can’t measure or are unsure about with caution. Print advertising is an example as it’s almost impossible to measure how effective it is- so we avoid it. Being a lean startup, we need to make every dollar count- so if there is any ambiguity about us seeing any returns, we just won’t run it.
We did fall into the mistake of building up stock levels for a group buying deal with a large company who I won’t name. They convinced us we’d move lots of units and required us to have large amounts of stock available for the promotion. When they deal finally ran they only managed to pull in a small percentage of their predicted sales and we got stuck with the excess product. We did eventually sell through it, but it tied up a lot of cash and could have prevented us from pursuing other opportunities.
Don’t stretch yourself further than you what you can recover from if it goes bad.”
3: What made you think about using a referral program + how did you get around to it? What was that process like for you?
“In the early days we had customers asking for some way to refer their friends which would allow them to get a kickback for their efforts. I was browsing through the Shopify plugins and came across ReferralCandy. I had seen it used by another online store and the reviews looked positive so I gave it shot. I added the plugin to Shopify, set up the basic email templates and hit the go button and its been humming along since.
I think I’ve only looked at it a two or three times since we turned it on and it just works its magic in the background. It’s just another thing we can offer our customers; extra incentives with minimal effort from our end.”
Lessons and takeaways:
- Start by building deep expertise. You’re going to need a ton of domain expertise before you can even think about tackling a serious problem worth solving. Chris’s background reminds me of Zé Pinto Ferreira- the founder of Mellow. Read more about Mellow’s story here: How Mellow Made $200,000+ in Preorder Sales In Less Than A Month
- Iterate until you get great feedback. Chris bringing his prototypes around with him everywhere he went reminds me of Bonobos founder Andy Dunn, who would carry a duffel bag of pants with him wherever he went, even to weddings and brunches.
- Build a community of early adopters. Your brand isn’t just what you make it out to be- it’s what other people think of it. To build a brand, you’re going to need to get as
- Study Kickstarter successes. If you’re going to use Kickstarter, study the success stories and build a community in advance. I’m especially reminded of how Lockitron did the same thing, analyzing what was successful about existing campaigns. There’s no reason to reinvent everything from scratch- just focus on the innovation that you’re bringing to the table.
- Be prepared for preorders and traffic surges. Opena Case received an overwhelming amount of traffic after Ashton Kutcher tweeted about them, which broke their site and cost them lots of potential sales.
- “If there is any ambiguity about us seeing any returns, we just won’t run it.” Exhaust your best customer acquisition channels before you think about experimenting with hard-to-measure channels. You have limited resources, don’t waste them!
For more customer acquisition stories, check out our Customer Acquisition Case Studies category.