Building a better brand through crowdfunding
Campaign can double as a savvy marketing tool
Jamil Kahn was a software developer with no background in the fashion industry when he came up with an idea for a new kind of parka that would have gloves, hat and scarf built right in.
“It was prompted by the inconvenience of having to shove my gloves and scarf in my coat all the time,” he says. “It just made sense to make them part of the coat. And the technology is there to make it happen, so why not?” The upshot: in 2015, Kahn quit his job to concentrate on his Smart Parka.
The question was how to fund it. Going to a bank wasn’t an option. “They want to see three years of cash flow,” he says.
While he could have attracted some angel investors, Kahn opted to crowdfund the venture. For less than $1,500, he hired a videographer and crafted a catchy video that showed some of his friends wearing the prototype jackets.
Kahn’s launch became the most funded campaign ever run on Kickstarter Canada, raising almost $3.28 million to get his company off the ground by pre-selling the coats for about $300 each (they will retail for $600 to $750).
Even better, he created the kind of buzz that got him noticed by the national — and even international — media. And all those backers were potential brand ambassadors, showing the video to others and talking up the product. “Kickstarter can turn a company into a brand for zero dollars,” Kahn says.
Craig Asano, founder and executive director of the non-profit National Crowdfunding Association of Canada, agrees. Crowdfunding can be “a tremendous marketing platform for small businesses and startups in particular,” he says. “With crowdfunding, you’re really, in a sense, going public, in that there are a lot of eyeballs tracking you.”
While many small businesses fly under the radar of conventional me- dia because they don’t have big marketing budgets, they often have “an incredible story to tell,” says Asano, “and crowdfunding allows journalists to connect with them.”
It’s also a great way to assess risk by testing a new product or service before a full launch. “It’s a channel to your customers, who could become backers,” says Asano. “That is the best direct marketing: there’s engagement and interaction. People can ask questions of the founders.”
Certainly, when Dave Mottershall managed to crowd fund $40,000 to launch his Toronto restaurant Loka, it served as a ringing endorsement of his concept for an eatery that specialized in locally sourced, nose-to-tail cooking. But that wasn’t the end of the relationship. “We finished the campaign last August and continued to keep in contact with our Kickstarter supporters through that platform until we launched six months ago,” says Mottershall.
“We shared the ups and downs of looking for a location as well as the renovation. Now we continue to keep in touch through our socialmedia channels.”
Those early supporters continue to come, and they can see their names listed as they walk through the door of the restaurant, which was named the best of 2015 by Now Magazine, as well as one of Toronto Life’s 20 best new restaurants.
“Interestingly, after we opened, we discovered ‘loka’ in Hindi means ‘people’,” says Mottershall. “Without our people, Loka would not exist.”