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Crowd funding your electronics product – Kickstarter and ‘The Joey’. By Steve OBrien and David Meiklejohn Have you got a great idea for an electronic product? You’ve designed it, it works – and now you’d like to build and sell some. How do you cover the cost of building the first batch? And how do you find your first customers? Kickstarter may be the answer for you ... K ickstarter is a crowd-funding web site, based in New York but it is a global web business. You sign up and describe your project idea and your project plan. If it is a technology product then you must have a prototype to demonstrate. Once the project meets Kickstarter’s requirements it can “go live” and the campaign runs for up to 60 days, although one month is recommended. People can choose to back the project by pledging to buy your product and if the funding target is reached then you can proceed to deliver your project. It’s all about minimising risk on both 62  Silicon Chip sides – if your project doesn’t reach its funding goal, everyone walks away without paying a cent and you haven’t sunk money into building a product which may not be viable. There have been some very successful Kickstarter projects; two outstanding campaigns we’ll mention here are the Pebble and the Flow Hive. Pebble Smartwatch The Pebble is a smart watch, designed to provide an affordable alternative to the well known smart watch suppliers. Pebble raised over US$10 million inside one month in early 2012 – that was the biggest dol- lar value Kickstarter project at that time. Using this capital to fund further development and production, Pebble watches started delivery and they have now manufactured more than one million units. In 2015 Pebble announced a second Kickstarter campaign for a new version watch, the ‘Pebble Time’. It raised US$500,000 in the first 17 minutes! It then hit US$1 million in 49 minutes, US$10 million after 48 hours, and more than US$20.3 million after 1 month (the end of the campaign) with over 78,000 backers. So they financed their product and got their first 78,000 customers at the siliconchip.com.au Two highly successful Kickstarter campaign products from completely different areas. On the left is the Pebble Smartwatch which achieved $US20.3 million in funding. At right is the Australian Flow Hive, which hoped to raise $US70,000 but achieved $US12 million Kickstarter funding from 24,000 backers in 130 countries. same time! The Flow Hive Good old Aussie ingenuity is still alive and well – at least that is what 24,000 Flow Hive backers believe. The Flow Hive introduced a new way to extract honey from a bee hive. Traditionally, honeycombs need to be lifted out of the hive and the wax is scraped away so the honey can drip into a collecting bucket. This disturbs the bees – and smoke is commonly used to subdue them. In a different approach to the problem, the flow hive includes new honeycomb frames that separate when you turn a handle from outside. When the honeycomb cells are separated, the honey can trickle down and exit through a pipe at the bottom. You don’t have to open the hive or remove the honeycomb arrays and the bees are much happier about it as well! It was put up on Kickstarter in early 2015 in the hope of raising $70,000. The promoting video for Flow Hive went viral and they had reached their $70,000 target within a few minutes and hit US$2 million within the first 24 hours! By the end of the campaign they had over US$12 million and 24,000 backers in 130 countries across the world! Now they have to build and ship approximately 24,000 hives – but having too many orders is what’s called a ‘high class problem’. The ABC covered the Flow Hive in their “Australian Story” series in 2015. Other crowd funding websites While Kickstarter is the biggest crowd funder, there’s nothing new about crowd funding. In 1885 a newspaper campaign raised money to build the base for the Statue of Liberty (the statue itself was a gift from the French government to the people of the United States). Joseph Pulitzer, as in the lit- erature prize, instigated the campaign. Of course, crowd funding is not always for electronic products, in fact there are hundreds of crowd funding sites of many different types and a huge range of projects get proposed and funded, from films to books, gadgets, video games, music pop groups. Crowd funding sites also exist for investment, real estate and philanthropy. (Kickstarter itself does not cater for charities or similar fundraising). The Joey – a Raspberry Pi display board The Joey is a collaboration between the authors of this article, who agreed to develop and sell a handy display board for the Raspberry Pi. A new product often grows out of the need to solve an existing problem. In this case Steve was looking for a way to reliably discover his Pi’s IP address. If you have a Raspberry Pi then you’ll know there are a few different Two of the potential thousands of uses for the Raspberry Pi Joey DisplayBoard – showing the time on the left and the temperature on the right. The beauty of the Joey is that it doesn’t prevent other boards being stacked nor use I/Os. siliconchip.com.au February 2016  63 displays support – handy for a wide range of projects. They had a great product idea, filling a real market need. But would it sell? It sounded like a perfect fit for a Kickstarter project! The Kickstarter Campaign The Kickstarter page displaying the Joey and a brief description of what it does. Along with this page, a promotional video was produced. Notice the bottom line: The Joeys have all shipped! ways to connect to it. Direct connection involves either a keyboard, mouse and screen, or a serial port and terminal emulator into the console. An alternative, and often more convenient, way to connect to your Pi is over a computer network, either LAN or WiFi. But to do this you first need to know the IP address of your Raspberry Pi. For a fixed IP address, no problem. But a lot of the time IP addresses are allocated dynamically and it is not always easy to find out what IP address your Pi has been given, especially if you’ve taken it to a meet-up. Ideally, the Raspberry Pi would tell you the address it has been assigned. One approach is for the Pi to upload the new IP address to a website. Open that page with a browser, identify your Pi and copy the address listed. Another method is to run a script so that the Pi sends an email with the IP LOOKING FOR A PCB? PCBs for most recent (>2010) SILICON CHIP projects are available from the SILICON CHIP PartShop – see the PartShop pages in this issue or log onto siliconchip.com.au/shop You’ll also find some of the hard-to-get components to build your SILICON CHIP project, back issues, software, panels, binders, books, DVDs and much more! 64  Silicon Chip address each boot up. Both approaches work fine but they need a working internet connection to the outside world. If you want to be independent of the internet or if your connection is down, you need another solution. So Steve came up with the idea of a small display which attaches directly to the Raspberry Pi’s I/O connector. When the Raspberry Pi boots up it displays the IP address numbers in sequence and you can type these in to get connected. David had faced a similar problem, so saw the appeal of a small, unobtrusive numeric display, especially if it could be used alongside other Raspberry Pi add-ons. It could be used to display sensor readings, a count, elapsed time, etc. Although plenty of Raspberry Pi display boards are available, it can be hard to use them with other expansion boards – a lot of boards don’t stack and some use conflicting I/O pins. And you don’t need fancy graphics when you only need to display a simple numeric value. So they decided that the Joey would connect via I2C, to avoid the potential for conflict with the General Purpose I/O (GPIO) pins used by other add-ons and also made a 0.8mm thick PCB that sits off to the side, allowing other Raspberry Pi expansion boards to plug over the top. Joey uses a generic 4-digit display, so users can write to and display any numbers or letters that 7-segment Before you start a Kickstarter campaign you must set a target amount of money that needs to be achieved. Each campaign typically runs for one month and is “All or Nothing”. If the target isn’t reached then the project is cancelled – and you can’t change the target mid-campaign. Kickstarter take a 5% commission of the project total if successful and another 3% (or so) in funds collection fees. They had to decide how many Joeys they’d need to build to get the unit price “low enough”. After researching manufacturing costs and competitors (how much do other displays cost?), they found that they would need to build at least 500 boards. So they needed to set the funding goal high enough to cover the cost of building 500 Joeys, plus 8% for the Kickstarter fees. The next decision was how much to charge for each Joey. Backers actually ‘pledge’ to buy ‘rewards’ (the Joey display boards) for a minimum amount which the Kickstarter campaigners specify. It’s common to include a limited number of “early bird” rewards at a lower unit cost, to get the ball rolling and build some buzz quickly. They decided to price the rewards so that, if they sold around 250 Joeys, they would just about cover production and distribution costs. They would be left with some extra boards that could be sold later. Promotional Video The best way to explain your project is to make a video for the project page. In fact Kickstarter rules insist that you have a prototype built before you can go live. Steve lives near a Sydney flight path and doesn’t always notice the plane noise, but on the promotion video they made the planes were extremely obvious, so most of the audio had to be re-recorded later at another location. So don’t shoot your Kickstarter video on a Saturday morning in Sydsiliconchip.com.au ney’s inner west! Volume Production – China or Australia? When planning to make about 500 Joey boards, the question naturally arises – manufacture in Australia or China? The Joey boards could be built in Australia for only a few dollars more than China pricing, so local manufacturing costs are not the main expense in this case. But it turned out the international freight costs to send the Joeys to backers all around the world out of Australia were the killers. The cheapest package delivery from Australia costs over $10 (around the same cost as the Joey sells for!) and with tracking it is even more expensive. But from China small packages can be sent worldwide for $3 or less! Additionally the Joeys are stored at a logistics centre in China at low cost and held until dispatch is requested. siliconchip.com.au So Australian manufacturing loses out because the total cost to global customers is not competitive. A downside of manufacturing in China is that the critical step of building and testing prototypes takes longer than it would working with an Australian manufacturer. In fact, they had to go through a couple of prototype versions before the final changes were sorted out. Marketing. How do you find potential customers and tell them about your Kickstarter project? In Steve and David’s case, they sent emails to all business, professional contacts & friends to spread the word. They then sent tweets since Gooligum Electronics (David’s web site – where you can purchase Joeys online) has existing Twitter followers and notified a number of popular Raspberry Pi blog sites and posted on relevant forums. They also sent out follow up emails, posts and tweets in the middle and towards the end of the campaign to encourage any last supporters. The initial response was quick. It slowed right down for two weeks in the middle, then a final burst of supporters in the last week pushed it over the line. Steve’s wife has no particular interest in electronics, but it was funny how often she checked the web site to give him a progress report on how many Joeys had been backed each day. The Joey was successfully funded in October 2015 and was in volume production by December 2015, with 165 backers from all around the world. Although the Joey Kickstarter project itself is complete, if you need a useful display for your Raspberry Pi then the Joey boards are available for sale online at www.gooligum.com.au So if you want to get your product out of your imagination and into the hands of customers around the world, think about giving Kickstarter a try. You never know, it may go viral and you might end up with a high class problem of your own! SC February 2016  65