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Thoughts on our NMEA devices and software, NMEA0183 and NMEA2000 protocols, and related matters.


Kickstarter - looking back on the campaign

NMEA WiFi device on Kickstarter

Well, we successfully completed our first Kickstarter project, and now the dust has settled it is interesting to look back on it.

The first question is why we used Kickstarter in the first place. With electronics, much of the costs of manufacture lie in the setup time (even more so than with printing), so to get prices down you have to do a large run of PCBs and enclosures. And there is the risk that you manufacture a few hundred widgets, and only then find that nobody wants them. So we thought that if we used a crowd funding platform we would first check the demand for the device before going to manufacturing, and secondly we would get enough initial orders to get a bigger initial production quantity. 

Having made the decision to try crowd funding, the next thing was to decide which crowd funding platform to go on. For those new to this area, the first thing to note is that there are different types of crowd funding platform. These can broadly be split into crowd funded loans (such as Zopa and Funding Circle); equity for investing in businesses (e.g. Seedrs and Crowdcube) ; and rewards based for new projects, which is what we wanted. In our sector there are some UK based platforms, the largest of which is Crowdfunder, but looking at them they didn't have the global reach of the two main American players, Kickstarter and IndieGoGo, so we felt the British offerings were best suited to local projects. In comparing the projects funded on Kickstarter and IndieGoGo, we felt that Kickstarter had more specialist electronics projects like ours, so we went for them as we would probably get more backers through its community than IndieGoGo's.

Setting up the project in Kickstarter was relatively straightforward, as the platform is quite limiting in what it lets you do. For the essential video, I pulled in my friend and video expert Simon Morice of i-catching movies in Southampton, and we had a fun day scripting, filming and editing - and then another day as Kickstarter said the first video didn't show the device in action sufficiently! Another niggle was connecting through to Google Analytics to give us a better idea of where people were coming from, as the tracking tools in Kickstarter are fairly basic. 

Another consideration is that, being American, Kickstarter isn't geared up to dealing with VAT (the sales tax used throughout the EU), which we had to cater for being a business based in the UK and large enough to be VAT registered. Basically income from Kickstarter is taken to be the same as any other sales, so VAT is chargeable on all sales in the UK, and to individuals in other EU countries, but not elsewhere. Whilst some Kickstarter projects bill EU backers for VAT after the campaign (such as Micromill, which we backed and are now using to prototype enclosures for other products), this approach didn't seem particularly easy for backers, and would increase our admin as well. So then we decided to cover it through the shipping charges - the reward prices are the same for all, but then those outside of the EU pay a shipping charge that is reduced by the amount of VAT that they don't have to pay. The only aspect not covered was sales to businesses based in other EU countries, and the VAT refunds to the few that fell into this country were processed manually when doing the final invoicing.

In the build up to, and during, the campaign, we obviously had a lot of emphasis on promoting it. In hindsight, we should have started promoting to the press earlier as we were too  late for the magazines, and we should have made a better prototype so that the images were more professional. As well as using a database we'd built up of marine press, and our existing mailing lists, we also used social media and online advertising, By tracking clicks in emails and online, and seeing how people were coming to the web site and the Kickstarter pages, we could see where potential backers were coming from, and adjusted our activities every couple of days using this feedback. LinkedIn was surprisingly successful, but Twitter gave poor results. Also, having the NMEA Tools web site outside of Kickstarter worked well, allowing us to put up a lot more information, and through the newsletter subscription to identify people who were interested, whether they had backed us or not. However all of this was considerably more time consuming than anticipated. 

Looking at those who did back us, a large proportion had not used Kickstarter before, which we had anticipated - whilst there is some overlap between the demographics of sailors and Kickstarter backers, they are not a close fit. However at the other end of the spectrum one backer had already backed some 1300 other Kickstarter projects! We did get more backers through Kickstarter's community than we had initially anticipated, which was a pleasant surprise. Most backers came from the US and the UK, with European supporters mostly from the Netherlands and Scandinavia - whether this was just from where we managed to generate publicity, or because we didn't translate into other languages and those countries have high levels of English speaking, or that crowd funding hasn't taken off in the rest of Europe, I'm not sure. We also got backers from unexpected countries, such as Romania and South Korea.

Looking at the rewards we offered, in hindsight I think the differences between the early backer, Kickstarter and normal retail prices were too large, so the order rate fell off markedly as each price point sold out. However more people than expected went for the bare PCB and so, expecting this was because of the price difference with the complete device in a higher price band, we offered an upgrade after Kickstarter, which most people ordering the board went for. There has been quite a lot of discussion in the Kickstarter community on whether it is worth having different price bands - it worked for us as it meant that we easily got the level of backers we needed to ensure that the project was viable.

Manufacturing the devices was pretty straightforward, as in the design stage we had always been working on a design that could be made in quantity. We settled on a run of about 3 times the number backed in Kickstarter to get the unit cost down. In some ways the biggest challenge was the packaging, as we wanted a box that was quick and easy to assemble, yet the quantities weren't high enough to justify a custom box. We were pretty well resigned to having to fill each box with styrofoam pellets and manually tape each box up, and then we found the right off the shelf solution from a German manufacturer, who produced it for shipping mobile phones. 

There was more labour than anticipated in the shipping. Kickstarter's tools for getting shipping details are pretty basic, and we just get a spreadsheet file with all the latest survey results, so had to keep re-downloading this as more responses came in, and we had to chase up some people afterwards to get shipping addresses. We then cobbled together a system to take this data, generate a manufacturing spreadsheet so for each reward we knew the serial number and what they wanted, plus another that had the invoicing information and the shipping address reformatted to the way the postman expects to find it, plus manually entering the orders into the accounts system for invoices and delivery notes. . Because the device is small and light, post is the cheapest way to ship it, though I think we overwhelmed our local village shop that doubles as a post office with four large bags of packages to send out on a signed for service, so paperwork had to be done for each one individually! Having just 100 devices to ship was significant work - I can understand why projects that unexpectedly get thousands of backers really struggle with fulfilling the orders, especially where they have given their backers lots of options.

So all in all the use of Kickstarter was a success, though as always one learns from the experience, and things can be improved for next time. So you can expect future products to be launched by us over Kickstarter in the future.

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