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Friday, December 21, 2012

Successful Crowdfunding Campaigns Aren't About Cash, Says Shark Tank Winner

As a continuation of this series on crowdfunding best practices and stories, I recently spoke with Tiffany Krumins, the creator of the AVA the Elephant brand and an ABC Shark Tank winner.

We discussed what’s really driving her business decisions and first crowdfunding campaign on Indiegogo. It’s not about the cash.

Before starting your crowdfunding campaign, be very clear about the purpose and what will resonate with many people. A clear, meaningful purpose will also help you overcome inevitable challenges along the way.

Ava Thermometer

First, I wanted to take back a bit of control of where the money was coming from and the limitations on the money raised. Second, it is very important for me to be able to give back to others.

Because of the rapid growth of my first product, money had to be pumped right back into AVA the Elephant stock in order to grow and add new retailers. I was only able to give in-kind donations for the past 3 years. My crowdfunding campaign allows me to give 10% right off of the top! And to give it to Dream Street means the world to me.

I picked Indiegogo because of the flexible funding option. I would have been devastated to get 90% of the way there and not receive funding because I didn’t reach the goal.

The misconception is that an investor is an open checkbook. Yes, Barbara is still my AVA the Elephant investor. However, this is a brand new product and I wanted to be able to put some of my profit towards it as well as crowdfund the rest.

With the quick success of AVA the Elephant, it meant buying double the stock each time in order to enter the next large retailer. This equals hundreds of thousands of dollars. It also means that funding needs to support that product in order to get into more retailers.

The second product has to be looked at as almost a new company, or at least a brand new investment.

Pitching people online is a good fit for me. I believe they can see the passion I have for children and that matters to them. They want to know they are getting behind a good cause.

The similarity is, there is a certain amount of money to go around. You have to fight for each dollar.

I made 95% of the go-to-market preparations before launching. As a business person, I needed to know that it was a viable idea, one that was a great fit with AVA the Elephant and most importantly something I would be proud to sell.

I said from the beginning I would never just sell stuff to extend my brand. I waited three years to even consider a new product and this was the perfect fit! The only thing left before production is a few package changes and funding.

Reminding people of the struggle some kids face when taking medication or having their temperature taken is key. For some kids, my products are fun. For others who are fighting serious illness, my products can make the difference between a good day and a bad day. That was why my entire journey started, to ensure I could bring more smiles.

I would ask them this question: If you were diagnosed with cancer tomorrow, would you still want to fight through the struggles of launching your product all while fighting for your life?

I personally had to face that difficult decision. I pushed through because I have an undying passion for helping sick children. You will hit lows in this process that will break you, over and over again and if you don’t have a passion for your product [and purpose] you will never make it.

I once invented a toothpaste related product and actually pitched it to a show similar to Shark Tank. I never heard anything. Two years later I saw it on store shelves and traced it back to the same people. I could be heartbroken about it, but knowing what I know now, I would have never made it with that product.

When cancer struck I would have given up with that particular product. But with AVA the Elephant, I could never give up. I pictured children in the hospital who giggle at her when she talks, and kept pushing through.

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