Last week marked perhaps a small click for eCommerce but a huge leap forward for our brand. After more than a year of ideation, design, testing, partnership, and focus groups, we were ready but still jittery with anticipation at 3 am Thursday morning when we flipped the switch, releasing our flagship product to the world. Not having reliable forecast datasets, we were filled with awe, [and lots of refreshing of the page], as the first orders started rolling in within the hour and built as the sun rose. The early prototype testers, community members, and even our social following began shopping and soon kind messages of support along with many encouraging questions - What does it mean to pre-order? Can we get gift cards for the holidays? Do you ship internationally? Beyond our immense gratitude and pure excitement to see our product take off, we want to address these questions, so in this and subsequent blogs we’ll be sharing insights alongside our reVessel philosophy, future innovations, pre-order updates, and inviting you into our tribe as we create a ripple effect of doing MORE good with LESS.
Today we’re tackling Crowdfunding and Pre-Orders: The Benefits to the Company and Customer.
As the old adage goes, you need money to make money and being a purpose-driven company we’re not talking about greed, but an opportunity to do good in the world through capitalism. Even companies on a shoestring budget rely on fiscal resources to build prototypes, hire, test, market and eventually commercialize. Traditional models revolve around leveraging loans from banks and approaching angels or venture capitalists. While great options for conventional products, these lines are hard to secure for new entrants or futuristic products and especially challenging when interest rates are high. Additionally, with structured capital investments, the demands, payback periods, and often the oversight are intense and may strain some of the dynamic entrepreneurial initiatives.
Enter the rise of crowdfunding: where people and businesses raise money from large groups of individuals. While historical accounts of its birth vary from 1700’s Irish loans to the poor to Alexander Pope raising money for poetry translations modern crowdfunding turns digital in 1997 with its online platform. In this year, a British band, Marillion, was looking to make a reunion tour but couldn’t foot the $60,000 bill. So they reached out to fans who responded by funding it themselves. Since then, online businesses like Fundable and Indiegogo emerged and fully hit their stride in 2012 when the Jumpstart Our Business Startups (Jobs), better known as the Crowdfunding Act, was signed legalizing equity crowdfunding. President Obama remarked, “for the first time, ordinary Americans will be able to go online and invest in the entrepreneurs that they believe in.” Beyond just charity and donation type investments, this gave rise to what we now see as everyday pre-sales and early orders for those wanting to support local companies.
In the half a decade since the act, there has been no shortage of platforms supporting all nature of crowd-sourced funding types. Take the leader, Kickstarter, whose name has now entered into our everyday vocabulary and raised a whopping $4 billion in pledges in support of nearly 155,000 projects. There’s also IndieGogo and success stories like Code.org. In this case, the computer-science driven company was so appealing that it caught Mark Zuckerberg and Bill Gates attention and since then this 2014 initiative has grown into 50 million students learning to code in this first week of December alone. The list of platforms continues to surge with big players like Patreon (monthly subscriptions for musicians), GoFundMe (focusing on personal emergencies or short-term projects), MightyCause (as the name employs focusing on nonprofit work), RocketHub (the social network for entrepreneurs) as do the household brand names funded (try Oculus Rift, and even Super Troopers 2).
The merits of crowdfunding are somewhat obvious. The model provides an alternative source of funds for the company, especially for those looking for less than a traditional bank loan, entices an early-adopter community poised to spread word of mouth, and most importantly gives an early indication of demand which helps inform supply needs, customization, and refinement. It also entices customers with a new product to get excited about and feel connected to a company or brand that’s just setting out. The downsides include that it is a riskier model, a full dependence on volatile fan support and even added fees that can be between 2-15%, if on a hosted platform. Lumo Lift took this into account when they rolled out their second product. After reaching $200,000 in just 40 days on Kickstarter they decided to fund their subsequent iteration directly and it’s worked to the tune of 13,000 orders a day. Lumo Lift realized they had enough traction to cut out the middleman and deliver it directly to their audience.
At reVessel, we were intrigued because we wanted the control to self-fund but also a chance to team up with our community to create our products in tandem with the needs. We considered the usual platforms and investment models but ultimately decided that via the support of our existing network and the advances of Magento’s backend system, we had enough volume to launch pre-orders directly on reVessel.com. Pre-sales makes sense for us and ties us to a fellowship we know is eagerly awaiting these next-gen food storage containers. The revenue raised in this pre-sale will ensure that we can meet the demand of this first production run which includes covering production costs, building out infrastructure and tools to stamp, mold and fulfill, and importantly fuel our research and technology efforts that are part of our larger line of 2019 reVessel food storage innovations. As our products are made from steel, we have invested heavily in patenting our process and creating a truly unique, submersible, water-tight, and food-worthy container, and it is helpful for us to know early on the level of demand so we can equal it with supply. It’s a win for both us, the company, as the capital comes from an already interested fan base, and it’s a win for customers who benefit from hefty promotional pricing, free shipping, and first access to otherwise unobtainable products.
The sometimes mentioned downside of pre-sales is the lack of immediate fulfillment. Mass customization and on-demand have left us all expecting immediate gratification. “We too would love for the reVessel brand to become an overnight success, but for long-term growth, we believe patience, restraint, timing, a strong foundation from inception and positive word of mouth from service and strong back-end systems will benefit our customers most,” says our founder Jessica Bell. After reflecting on Tim Wu’s op ed piece, “The Tyranny of Convenience,” as he postulates that while now is great it’s also leading to less creativity and individualization and, “we must reflect the joy in doing something slow and something difficult and the satisfaction of not doing what is easiest.” The process of invention, tooling, and testing has made our team make conscious efforts to evaluate and iterate so that ultimately our products are stronger and smarter because of the process. That’s why we appreciate your patience too as we work to perfect the final details of our products and hope that this early lift in sales is an ode to intelligent design and purpose triumphing over fast and cheap.
This culminates in our excitement to our limited Pre-Order window announcement. We’re eager to preview our product in advance and give those of you itching for the first chance to own it, that opportunity. We know our products are right for a certain audience, those of us wanting for safer, durable and more versatile solutions to freeze, bake, store, and travel with our food. The only thing the Adventure Kit doesn't come with is your favorite food. That's where your creativity and individuality comes in. As 92% of us are more motivated by peer recommendations than by advertising, we hope you’ll share our reVessel Adventure Kit and future products with your friends and family.
If you have questions, thoughts, or want to know just how adventure-ready our containers are, please reach out. Or better yet, Pre-Order now and you can test them for yourself!