 Hello. Thank you very much. Thank you for joining this talk. We have just finished our MrBeam Kickstarter campaign last week. Right now we are here to share our experiences on crowdfunding, Kickstarter, or a hardware project. And, well, here we go. Well, first of all, has anybody thought about crowdfunding something? Nice. So, we are Tea and Philip. I'm Philip. That is Tea. We are software developers with a computer science background. And we're working as app developers and web developers for a few years. And somehow got bored. Tea's startup didn't go anywhere. I was working as freelancer and, well, we needed something new. And, yeah, and something new to learn and stuff like that. And we have never done hardware. We have no idea about crowdfunding, finances, marketing, sales, anything like that. So, we thought, let's do a hardware project and go on Kickstarter. Yeah. A little bit about our project. It was MrBeam. MrBeam said, do it yourself, laser cutter and engraver kit. It was born because we wanted to dig a little bit deeper into 3D printing. And we needed some kind of goals, some kind of projects to not to just humble around to get a little bit more focused on the topic. So, we decided we built one of these. Do it yourself, laser cutter. First with a laser diode from a DVD burner. And later we upgraded it to a one watt class four laser. And while we decided to open the hardware and the software, we didn't release very much yet. We already released a little bit of software, but there's still some cleanup to do in the hardware stuff. We managed to send out the hardware rewards for all the backers just in the week and now we're working on the backlog. Well, everything was done with open source software and that was an open source hardware and that was one of the reasons why we wanted to open source our project as well because we started October last year and right now we just finished the whole Kickstarter thing and we wouldn't have been that fast without all these things you see here. The open scott for engineering, the 3D parts, the key cut for making electronic circuits, inkscape, gerbil, octoprint, Arduino, you all know these projects and we want to say a big thanks for everybody who contributed in that. We already said we chose Kickstarter, but in the beginning we didn't know where to go on which platform to put it and we looked at different ones but we didn't really know if anybody wanted to have a home-built DIY laser cutter so we went the safe way and chose just the biggest one because Kickstarter is the market leader or was at the time and so to be safe we chose Kickstarter which made everything a little bit harder because in Germany there's no Kickstarter representation so we had to use Tia's brother who has a green card and lives in the US and set up all the things you need like a bank account and Amazon payments account and all those accounts basically and the company in the end and that made it possible for us to have a Kickstarter project well, started from Germany and one big preparation was a working prototype because at that time Kickstarter only accepted hardware projects if you could present a working prototype I think it changed in the meantime but we worked like two months or something on the prototype and then got all the bureaucratic stuff set up and went on planning the whole thing and how we set up the campaign so a big part was planning or estimating the costs we would have for example the hardware like the source materials that we bought stepper motors, plastic parts, cables, everything and also the money it takes to put all the things together and that's then the COGS, the cost of goods sold as I've learned and also we had to do more prototyping we had to take into account the money we had to use to live off and we almost forgot some other things like lawyers and tax advisors and then you also have the fees you pay to Kickstarter and Amazon payments and then there's taxes, everything but we managed to I think we did a pretty good job calculating the stuff it's not like we got rich or something but we didn't get poor either or not poorer than before as we mentioned we didn't have any financial background and it was one of the most difficult parts how to approach that and luckily we added big buffers money and time wise like 20-30% in both and we ended up using the money buffer right away spent it all and also we took a little bit more time used up the buffer in the time and also spent one and a half months more than we planned but it's not too bad for a Kickstarter project I've heard and then if you have all the costs together and you know what it's going to cost you to produce all the things and send it out, you need to think of shipping and then you have to produce a number that you put on Kickstarter and also think of a total funding sum that you want to read you don't want to even if you can't produce one kit for a reasonable price you don't want to produce just one like you need maybe at least 60 to get it going because it's not worth the work otherwise and yeah luckily we managed to get four times the money we asked for so yeah we were good on that Yeah, second task was to present the project on Kickstarter therefore you need a video that was quite difficult either we read a lot about successful Kickstarter campaigns and advices and whatever and the most interesting or the most important part was that you have to tell a story you don't have to be professional but it must be some kind of story behind it and first of all we made a video it was almost ready it was edited until the end and we showed it to some friends it was the first feedback was so well yeah that's nice but I don't care about if the electronic circuit is working with 12 to 24 volts and well we had to admit okay that's perfectly true We spent two months on the prototype developing the technical details and then we wanted to present all the things we thought of and how we built it and everything but in the end the people didn't care about what works more like what it and we're interested in what it does or what it can do and in that moment you are so proud of what you have done especially if you didn't have any knowledge about electronics before and so you wanted to mention it and well we learned it just drop it it's not important at all tell the story and show the use cases show use cases is quite important that the people are getting some idea quite early in the video what to do with the thing you are trying to promote here we revised the video and made a second iteration and that was quite better also in Quickstar I don't know about the other crowdfunding platforms you can preview before you actually publish the project to the world you can preview the campaign and send it with a special link to your friends or colleagues or whatever so we didn't know about that in the beginning but that's very helpful because it's the step to the last it's really helpful to show it to somebody else well then we started the campaign at 2 o'clock in the night because we thought well the US just has finished work then and that might be a good start we ended up without some sleep for several days we got tons of emails and needed a lot of coffee to answer them all and even if you make some FAQs people are just continuing asking questions that was a really really exhausting time first we thought well at that time during the campaign it was running 32 days we could develop the software further and maybe research about third party suppliers but we really needed almost 24 hours for supporting all the questions for answering all the questions finally after the campaign you have to wait 3 to 4 weeks for the money because the first Amazon payments is collecting that from the credit cards from the backers sometimes the credit cards fail Amazon payments is trying that another time and well it took some time until we really got the money and could order the stuff we needed another point is we got a lot of emails offering help they were somehow really useful someone saying hey I'm a very friendly beta tester if you need just give me a line another one is if the curious one was some kind of we are curry feinstein style lounge and we want to promote your product next to other big brands like Gucci and Dolce and Gabbana in the golden globe awards and you're like what I don't know if this fits here and so we ignored them and when we finally had the money we had to transfer it to Germany and finally we could start shopping for all the good stuff we bought maybe half of the stuff we ordered parts in China through Alibaba and Aliexpress very helpful there it's a little bit I was a little bit afraid we had the motors there because I was wiring like 7,000 euros to a bank account in Hong Kong and all I had was an email saying yeah we'll ship the motors after we receive the money so but we were lucky we got all of our parts nothing really was bad or didn't arrive the motors actually they sent us some wrong tracking number and they thought it's already delivered we checked the tracking number it was delivered somewhere in Singapore I was really getting afraid but they sent us different tracking numbers it's kind of a strange feeling if you feel the responsibility of delivering some stuff to your backers who are so kind and give you such a money yeah then another very, very new task to us was to make an electronic shield for the Arduino it's basically a combination of stepper drivers and the laser diode driver in our case we made four prototypes because if you make one mistake in this part it's not upgradable with a bug fix release or something it has to work from the first production run something that was really new to us being software developers you're not used to that the worst case happened we had the third prototype ready tested and it was super working well but then the manufacturer of one very important IC said hey sorry we discontinued this chip and we said oh well, well now then we had to find an alternative and had to do a fourth prototype which luckily was quite good from at the first iteration we were a little bit experienced at that point so it went a little faster we have quite a few plastic parts that we need for the gigantry for the whole device basically we thought about injection molding but somehow the numbers weren't high enough so it's too expensive or doesn't make sense for a small number and we ended up 3D printing all the parts it was 7000 parts in the end like 90 kilograms of plastic and spent our four printers for four months printing spent maybe I don't know 600 hours maintaining and well taking plastic parts off and cleaning the extruders and everything so it's not the best idea to to produce that many parts 3D print that many things or yeah it's well it costs us some time well we luckily we set some upper limit on our Kickstarter rewards and we almost reached the limit and in the end I would say it was almost a little bit too high because all these manual tasks we had to do which are not enough for mass production but way too much for two persons alone since cable trees if you are crimping cables cutting cables and whatever soldering stuff it just takes a lot of time we had to deburr steel rods we spent a lot of time finding a correct steel or a good steel supplier who is delivering already the correct length of the piece of the steel well in the end we ended up hiring two students which was an additional manufacturer in the end but without them we wouldn't have made it yeah also the manual parts were really where the problems lied so on the picture you see the frame parts you need four of them for each kit we had 260 kits and that was after me after cutting all of those and before drilling holes into them so that was a good few weekends spent and also we spent a lot of time the effort for starting something like that the first time effort is really big you have to find all the suppliers go through Alibaba and check the ratings sometimes they promise things that they can't deliver and the drilling was really bad in the end we had some fun as well first of all we were invited to the Fabcon 3D in Airport that was a small 3D printing fair some weeks later we were invited at the Fab10 conference of all the Fablabs in Barcelona this was a really nice experience there we met some people from the government of Georgia they invited us to an innovation camp in Georgia it was some kind of nice holiday between the whole Kickstarter campaign we were invited to TM Wissen at Servus TV it's the TV station of one of the biggest media companies the Red Bull media don't laugh we went to the Maker Faire Rome which was a really huge fair it was impressive and finally we were in the Make magazine formerly known as CT Hex there we have the journalist sitting in the first row who wrote the article we made a little road trip through the US because we wanted to deliver some of the parts in person our Kickstarter campaign was based in the US so we thought it would be cheaper to not spend the money on the shipping to the US but just deliver it ourselves it didn't work and in the US we made some very inspiring person this guy that's actually Lord British maybe one or another one knows him he founded some nice software company Origin in the 90s after all it was a huge experience I'm really glad that we have done it you probably as well it was kind of exhausting as well some takeaways the cost calculation at once is super important we did our best but it was not enough compared to other Kickstarter projects we have made it somehow quite good we are only two months delayed we are around about 00 right now so I would recommend if someone was doing some kind of crowdfunding think about scaling before even if you are not sure if your idea will be a success just be prepared for that about the cost calculation we heard from Kickstarter projects or crowdfunded projects they ran out of money just before they wanted to ship their rewards we don't have anything anymore then the 3D printing it scales to some point but at some point you need at least one person full time to maintain the printers even though our printers had some auto leveling bed and were quite time saving in the calibration then we underestimated the duration of the manual tasks like cutting cables and additionally the duration of finding the right suppliers that was a really big time time consumer well then another advice would be just to think what we want to do with the project afterwards is it just a project like we thought in the beginning or do you have plans to make some kind of company out of it or to make the project open source or to get it growing somehow it would have been good if we had done something like that before and well we are rich in experience right now but we are not rich in terms of money but we made it and it was kind of fun thank you both very much for this very interesting first hand speech or talk now as usual we have some questions please line up if you have questions over here we have two microphones over here, two microphones over there we start with IRC questions sorry no questions from IRC, network is down we start with number one please ok cool project congratulations just wondering how much effort you put into actually marketing your campaign once it was online and how you went about that we didn't put any effort in marketing our campaign we put it online we reached our goal in 48 hours we saw the visitors coming from Kickstarter recently launched projects so we were very lucky at that point and then we thought ok we may do some marketing if the campaign is slowing down during the time or during the period but in the end we almost reached our upper limit of devices to produce we didn't do any marketing but we planned when to start the campaign I'm not sure if that helped but I do think so so we launched it in the US when people came home from work also on a Friday but no marketing after that we published some things on our social networks that was it how many devices did you ship? 240 thank you my question is how many emails did you have to reply to or people you had correspondence with via email versus those that actually then participated or contributed maybe we have like 350-360 backers I would say 5-6 times that 5-6 times thank you number 4 please yeah in the first place many thanks for this awesome story one question in the last slide you advised to think before about what you want to do if this is only a project or you want to take steps further and then you mentioned that you in the first place thought only of it as a project but you said in the first place so what is the next step for you guys well the next step is to grow the company we have a company right now we try to get venture capital after the Kickstarter campaign we request per day for a device we couldn't deliver that so we thought let's just try out what is going on okay but you now thought of where this is going to end, where you want to end for me it was like let's do the Kickstarter and then I would plan on going back to my normal work that was the problem thank you I was wondering why you chose Kickstarter over some other crowdfunding servers and why only Kickstarter and not some like 3 crowdfunding services okay well we have chosen Kickstarter because it's just a market leader it is huge I thought my brother lives in the US otherwise he would have probably been using Indiegogo but we just read the 2013 numbers from Kickstarter they had some slides they were very impressive and so we thought Kickstarter would be well to make some crowdfunding parallel on platforms I think it's a huge effort but it's already too much on Kickstarter the first week so I'm not sure if it's a good idea if you don't have a big team behind you thanks thank you number two please could you say a few more words about the legal side of things so you did that as a private person not as a company what about regulations and liabilities you might run into someone who has his eye out with it and wants to sue you with it or the FCC tells you that this is not regulated or whatever so could you just say a few more words about people interested in producing hardware what they have to pay attention to or perhaps they don't have to so we do have a company because of the liability issues we did do that and well we did the project as a DIY kit like Bausatz in German which shifts the liability to the person or some part of the liability to the person assembling the kit and also it takes away the requirement to comply to all the regulations like CE or electronic waste and everything so you founded a company before you ran the Kickstarter so which legal form did you choose to do that an LLC, a limited liability company you can do that via an online service within an hour okay thank you now do you feel like you've got a sort of community of users a kind of audience through which you might try and launch similar products in the future or do you see it kind of as being the end of this project and then you'd start a different kind of venture yeah right now trying to build a community around our MrBeam project we have some quite very active members community that was the reason why we wanted to do it as open source so people can decide if we want to continue it or not and people can just work on their own and extend it we really want people to work with it and improve it or develop attachments the work did you learn anything from your backers kind of during the campaign did you hear about any feature requests or tweets like what color you should paint it or stretch goals yes a lot you have to just block it and others are quite nice ideas somehow to manage it you also learn a lot about use cases people who want to use what they want to use it for and yeah sorry to interrupt so there's enough time outside to meet this guy so please give an round of applause for this very good speech