This success story is part of ExportWise’s crowdfunding series.
Anyone who doesn’t think that crowdfunding can be a game changer should look no further than Montreal’s Revol Technologies.
Over the course of the company’s 60-day campaign on Kickstarter that ended in early January 2015, Revol raised more than $2.5 million – a Kickstarter Canadian record – and secured approximately 10,500 customers in more than 100 countries on five continents for its revolutionary custom-fit Bluetooth headphones.
“It’s the most insane thing ever,” said Daniel Blumer, Revol’s co-founder and chief executive officer on the success of the campaign. “We now have thousands of customers in more than 100 countries. That’s something we couldn’t have accomplished without crowdfunding.”
Revols road to pursuing the crowdfunding route to finance its growth began in 2014 when Blumer, and co-founder Navi Cohen, had a conversation about filling a gap in the market.
“We saw a need for a better-fitting, more comfortable pair of earphones that currently wasn’t on the market,” Blumer said. “Custom-fit earphones are awesome – they don’t fall out and are very comfortable, but they also cost around $1,000, which is very expensive.”
The duo’s solution was to develop custom-fit earphones that are more reasonably priced – approximately $235. Through a year of product development, including some mentoring at Chinese accelerator HAX, Revol partnered with audio giant Onkyo to create high-quality audio headphones equipped with custom gel tips that, through a Smartphone app, can be customized to fit your ears in 60 seconds.
The customizing process is not the product’s only revolutionary quality, so too was the company’s crowdfunding campaign. Blumer and Cohen put in months of painstaking research to prepare for the record-breaking 60-day event. The duo’s homework included identifying previously successful crowdfunding campaigns and talking to the respective founders. The insights covered topics such as how to effectively leverage advertising to build marketing channels; how to identify key media outlets and pre-position a product with each one; and how to refine the quintessentially important launch video script and production.
“It’s a huge undertaking with so many components to it, so you can’t take it lightly,” Blumer explained. “You have to be confident you are ready, that your product is ready and that you’ve set up all the channels needed so you can deliver. The planning phase, to our surprise, was the most critical and intense.”
Blumer explained once a campaign goes live, it takes on a life of its own with success reliant on keeping early supporters engaged and the lines of communication open with each one of them.
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“The first 24 to 48 hours of any campaign are the most crucial,” Blumer added. “If you can generate and drive traffic to your campaign site, Kickstarter will start promoting you as a popular project. That’s what you want. It’s all about momentum – a snowball effect. If you start doing well it keeps going.”
Suffice to say the Revol team generated serious momentum. On average, the campaign generated $42,179 per day, far surpassing the firm’s original goal of $100,000, which is the bare minimum needed to cover the first manufacturing production run.
Blumer and Cohen developed the product with crowdfunding in mind. “Crowdfunding for us made complete sense,” Blumer said. “It was a great way to validate the demand for our product, create tremendous buzz and traction and a way to raise funds without giving up any equity.”
Keeping customers informed and managing expectations has been critical.
“The second we did this campaign, we became a public-facing company. Communicating with backers is a responsibility that requires a tremendous amount of time,” Blumer said. “However, we never take our backers’ support for granted and make a conscious effort to keep them engaged and up to date throughout the entire campaign.”
Another challenge that Revol is just starting to navigate is the logistical maze of shipping the product to more than 100 countries.
“There’s a lot of learning involved in that,” Blumer admitted. “But we’ve partnered with an experienced fulfillment provider out of Hong Kong that will help us co-ordinate international shipping and logistics.”
Looking back, while making a few mistakes along the way, Blumer says that he wouldn’t do anything differently, because it’s provided an invaluable learning experience.
He said crowdfunding has also given the entrepreneurs the opportunity to tap into a pool of research and development, right at their fingertips. Interacting with clients on a regular basis has provided great insight that helped to inform design refinements for Revols 1.0. Already, the company is planning the second version of the headphones, which once again will be offered to the public via crowdfunding.
“It’s exciting and we can’t wait to see what the future has in store,” Blumer said.