ShopI have been thinking about our experience using kickstarter a lot lately. Now that we’ve had some time to reflect since our Kickstarter ended, I wanted to share some lessons learned and some updates.
We had nearly 100 people back our project on Kickstarter and pre-orders for 80 smart propane meters. That was confirmation that some propane consumers want to monitor their tank levels. But despite the interest and generous support, we were left shy of our funding goal.
How we set the $20k Goal
We tallied fixed cost (testing, certifications, legal, insurance, etc.) and variable costs (materials, assembly, and shipping) for 200 units. Larger quantities of sales are certainly expected, but we hypothesized this many potential buyers would see the kickstarter and back our project.
After kickstarter’s cut of 5%, our costs would be roughly $54k. Afterall, Fixed costs for testing and certifications, to ensure the device is completely safe, total $25k alone.
So the difference between the $20k we sought as our goal, and the actual costs of $54k means we were willing to take a loss of $34k. That’s the balance of my savings account (we’re bootstrapping!), so that’s the additional investment I could make to ship you this product.
A look at those final hours
In the final hours, we received several offers to bring us up to the funding goal of $20k. We received a few requests for equity in return for the remaining $8k we needed. We got some offers for loans.
I politely turned down those offers because I know that our team’s experience with energy tracking hardware and software – and the work we’ve accomplished – has a ton of potential.
I know we’re the right team to make a truly smart propane meter that empowers consumers. We’re the first to offer something more than a simple tethered meter and we are getting great feedback from our alpha testers.
Ultimately, we need to make a product that people feel irresistibly compelled to buy. Artificially boosting backing to meet an unprofitable funding goal is not only ethically questionable, but it’s ignoring a warning sign about product-market fit.
The Aftermath
So shy of our goal, I looked back at our assumptions and what we learned since I started our company in August 2015. Our team is motivated to change the way the world consumes energy. Having the data to analyze how you consume and buy is valuable. Protection from running out is empowering! Afterall, you can’t manage what you don’t measure.
So with 8,000,000 households in the US using propane for heat, why weren’t more people compelled to buy?
Despite being a staff pick, only 1,300 people watched our full video on Kickstarter. Despite my love for crowd-funding, I wouldn’t call these platforms the world’s stage.
Perhaps the timing was bad. Right now, with extremely cold temps throughout the country, it’s more on the top of folks minds.
Perhaps most people think their propane supplier should be monitoring levels.
And the Good News
I’ll never know what percentage of the viewers of our Kickstarter campaign were interested consumers, but half a dozen propane suppliers saw it and reached out. They liked our product, and some placed their orders.
So we have been marching forward with engineering and testing the product. Prototypes have been refined. We’re user-testing and fixing our mistakes.
By executing this path, we’re covering a lot of our costs, bringing down costs for a consumer product.
We see more interest in our first product every day. Notice that I said first? In addition to getting close to being able to ship some units to Beta Testers, we’re doing some R&D on a fuel-oil tank monitor.
It is February 2016 and I just learned about your product. I only learned about it because I did exhaustive internet searches to inquire if any company had any kind of residential propane tank monitoring device for sale. My propane supplier still has no idea that any exist. Like many people I have purchased many smart home devices to keep me connected to all aspects of my home from security systems, motion sensors, door locks and lighting that all connect via a cell phone but I have never seen anything listed that monitors a propane tank except an outdoor camera which can only tell you that it is still there or show you when someone finally shows up to fill it.
I don’t think the problem is that nearly every person who owns a residential propane tank would not be interested in such a device. The problem is that very few potential customers across this country who are dependent on a large propane tank for heat, hot water or cooking even know that this option is even available. Why is the only question. Kickstarter didn’t reach the market that needs the device. Most people with propane are probably not highly technological Kickstarter followers. Those with the expertise to create this wonderful invention just need to partner with someone with some equal expertise in marketing to find ways to communicate directly to a very specialized targeted market in an inexpensive and effective manner. This is a no brainer. I’ve seen worse ideas on Shark Tank get millions in funding.
If you simply created a printed brochure that explained what you have to offer and negotiated with every residential propane supplier in just one state at a time to include it with their next delivery invoice, every propane customer in that state would suddenly be aware of the opportunity and it would probably even make the local new channels. The obvious advantage to every propane company is that many of their current customers would want to purchase the device themselves to own it for their owned tanks or be glad to share in the cost to add it to a rental tank which would reduce emergency orders and increase advanced orders to help scheduling. If their competitors offered it and they didn’t they might lose the business. Not a terribly hard sell. For a customers benefit, if the propane company would offer to add the device for no up front cost or reasonable deposit and charge a small amount to each delivery bill or to the yearly tank rental they could easily sell the program and recoup their costs and probably make a profit if they simply rented it.
The only problem is that no one knows that it exists. Now that I know about it I am ordering one this month as soon as I can get my idiot propane company to confirm the gauge face on their tank at my future retirement home located 3000 miles away. Not having this device is like having your car’s gas gauge located on the gas cap! Can you visualize that commercial? You guys have struck gold.
Just hooked up my tank monitor. Amazingly, it works seamlessly even in the concrete ground vault. I am going to mount it above ground but wanted to test its wifi capability.
Perhaps you need to pursue selling this to propane delivery companies? I found your product when my local propane company offered monitoring my tanks via cellular. They said it would be free but I know… nothing is free!