Pebble Build: Opal Ice Machine Campaign
Also, producers seek for funders’ feedback, as stated by Naturajan Venkatakrishnan director of FirstBuild, the primary objective of the Opal ice machine campaign was to obtain feedback from the market before mass production, also get the crowd involved in the ice maker’s design. As the project appeared to be successful, it also helped to promote the product and generate sales (Cowley, 2016; Brown, Boon, &Pitt, 2017).
Crowdfunding is appropriate tool for testing the product before its launch. By listening to the market needs, desires, and supporters’ feedback and work towards tailoring product features towards markets' needs and communicating those features back to the market (Gorshkov, 2011).
Involving customers in production of a certain …show more content…
product will increase the product’s success chances. Interacting with customers at different stages of product development increased product success rates. It is very important to interact with customers at the earlier stages of developing the product in concept and design phase and in the later stages like prototype testing. Financially attractive and close customers are most preferred candidates for close cooperation during product development (Gorshkov, 2011).
Calantone & Cooper (1981) claimed that the common reasons that new product launches fail as: 1) Better product, but no one want; 2) Fail to differentiate the product; 3) Technical fault or low quality; 4) Price not suitable to target audience; 5) failure to understand the market. By using Crowdsourcing all this common reasons will be tested, and if any Crowdfunding campaign succeed by achieving its target and get the funds all this reasons would not take a place.
Crowdfunding can be used as a direct sales channel by rewarding funders (backers) with the first version or samples of offerings. In this case the producers will not have intermediaries except for Crowdfunding site (Moisseyev, 2013).
The most financially successful Kickstarter campaign ever, Pebble campaign launched in April 2012 with an initial fundraising target of $100,000.
Backers could pay $115 to pre-order a Pebble watch, which would sell in retails for $150. Within 2 hours, Pebble achieved its funding goal and went on to raise $10.3 million with almost 70,000 individual pledges. Pebble was also a massive marketing success as it went on to become a major consumer brand and sold over a million smartwatches by the end of 2014. In February 2015, Pebble launched the second campaign for its new model, the Pebble Time, achieved its fundraising goal of $500,000 in only 17 minutes. By the end of the campaign, Pebble had raised $20.3 million from more than 75,000 backers (Brown, Boon, &Pitt, 2017). Advertising Age claimed that Pebble’s primary purpose is differentiating itself from main smartwatch competitors by selling its watches through a different channel (Knox, 2015).
The objective of the first Pebble campaign was to raise capital after its founder failed to attract funding elsewhere. This led to some additional, unexpected benefits like: product promotion and direct sales. But, the second Pebble campaign purposes was for marketing, direct sales, and promoting the new smartwatch (Brown, Boon, &Pitt, 2017). Also, Pebble used the Crowdfunding to differentiate itself from its main competitors Apple and Samsung by selling its watches through a different and new channel (Knox,
2015).
The Pebble’s second campaign was about marketing: Kickstarter gave Pebble access to its community to promote and distribute its product and guarantee a sales pipeline. As Kickstarter’s CEO stated in reaction to the success of the Pebble Time, that on of real power of Crowdfunding is distribution (Lapowsky, 2015).
Jerry Needel, senior vice president of sales and marketing at Indiegogo, expressed that as social media let peopleand brands to interact, share and communicate, Crowdfunding add a commerce element by allowing them raising the money to came with their ideas to reality (Rothfeld, 2015).
2.4. a) Demand estimation and Market acceptance
Crowdfunding can be used as a tool in estimating the demand, performing market research virtually free of cost, and create a pre-order channel for their new products. The producers can condition production on high demand, this introduce a valuable benefit for SMEs. As a successful producer told The New York Times (Kurutz, 2011): In the past, his firm would have risked its own money, hired a manufacturer and hoped for enough retailer and consumer interest to turn a profit, or at least break even. "The beauty of Kickstarter is it does away with that whole model.", he said.
Crowdfunding reduces the producers’ uncertainties in producing a new product. Crowdfunding also allows producers to lock in demand ahead of production (Friedman, 2013). If they do not lock in demand before incurring the production cost, they would be risking their investment should a bigger, more established rival get a similar product to the market ahead of them, and at a lower cost. Having secured the pre-orders placed them at a less risky position (Sayedi & Baghaiey, 2017).
FirstBuild is a well-known example of a successful Crowdfunding project run by a big company; FirstBuild is a subsidiary of General Electric. In July 2015, FirstBuild launched a Crowdfunding campaign on Indiegogo for a countertop nugget ice maker, the Opal. The project was very successful; The Opal ranks ninth in Indiegogo’s top 10 list of campaigns that have raised the most funds in 24 hours, and the 13th fastest to reach the half million dollar mark. While campaign’s funding goal was only $150,000, within a month the firm had raised nearly $2.8 million from over 6,000 funders. In an interview, FirstBuild Director Naturajan Venkatakrishnan highlighted the importance of the crowdfunding effort: ‘‘the benefits of launching a new product like Opal using the Indiegogo crowdfunding platform allows us immediate feedback on market acceptance’’ (Freeman, 2015). The Opal become available for purchase in regular stores. General Electric used its Indiegogo crowdfunding project as a test market to evaluate the potential demand for its product before committing to wide-scale distribution (Brown, Boon, &Pitt, 2017).
Crowdfunding is very well suited for gathering valuable data from the future/potential customers on what changes could be made to the product to make it more attractive to the market (Gorshkov, 2011).
Ultimately, if the project does not succeed to raise the necessary funding, it serves as a signal to the entrepreneur that there might not be enough demand for her offer (Gorshkov, 2011).
Crowdfunding is appropriate tool for testing the product before its launch. By listening to the market needs, desires, and supporters’ feedback and work towards tailoring product features towards markets' needs and communicating those features back to the market (Gorshkov, 2011).
Involving customers in production of a certain …show more content…
product will increase the product’s success chances. Interacting with customers at different stages of product development increased product success rates. It is very important to interact with customers at the earlier stages of developing the product in concept and design phase and in the later stages like prototype testing. Financially attractive and close customers are most preferred candidates for close cooperation during product development (Gorshkov, 2011).
Calantone & Cooper (1981) claimed that the common reasons that new product launches fail as: 1) Better product, but no one want; 2) Fail to differentiate the product; 3) Technical fault or low quality; 4) Price not suitable to target audience; 5) failure to understand the market. By using Crowdsourcing all this common reasons will be tested, and if any Crowdfunding campaign succeed by achieving its target and get the funds all this reasons would not take a place.
Crowdfunding can be used as a direct sales channel by rewarding funders (backers) with the first version or samples of offerings. In this case the producers will not have intermediaries except for Crowdfunding site (Moisseyev, 2013).
The most financially successful Kickstarter campaign ever, Pebble campaign launched in April 2012 with an initial fundraising target of $100,000.
Backers could pay $115 to pre-order a Pebble watch, which would sell in retails for $150. Within 2 hours, Pebble achieved its funding goal and went on to raise $10.3 million with almost 70,000 individual pledges. Pebble was also a massive marketing success as it went on to become a major consumer brand and sold over a million smartwatches by the end of 2014. In February 2015, Pebble launched the second campaign for its new model, the Pebble Time, achieved its fundraising goal of $500,000 in only 17 minutes. By the end of the campaign, Pebble had raised $20.3 million from more than 75,000 backers (Brown, Boon, &Pitt, 2017). Advertising Age claimed that Pebble’s primary purpose is differentiating itself from main smartwatch competitors by selling its watches through a different channel (Knox, 2015).
The objective of the first Pebble campaign was to raise capital after its founder failed to attract funding elsewhere. This led to some additional, unexpected benefits like: product promotion and direct sales. But, the second Pebble campaign purposes was for marketing, direct sales, and promoting the new smartwatch (Brown, Boon, &Pitt, 2017). Also, Pebble used the Crowdfunding to differentiate itself from its main competitors Apple and Samsung by selling its watches through a different and new channel (Knox,
2015).
The Pebble’s second campaign was about marketing: Kickstarter gave Pebble access to its community to promote and distribute its product and guarantee a sales pipeline. As Kickstarter’s CEO stated in reaction to the success of the Pebble Time, that on of real power of Crowdfunding is distribution (Lapowsky, 2015).
Jerry Needel, senior vice president of sales and marketing at Indiegogo, expressed that as social media let peopleand brands to interact, share and communicate, Crowdfunding add a commerce element by allowing them raising the money to came with their ideas to reality (Rothfeld, 2015).
2.4. a) Demand estimation and Market acceptance
Crowdfunding can be used as a tool in estimating the demand, performing market research virtually free of cost, and create a pre-order channel for their new products. The producers can condition production on high demand, this introduce a valuable benefit for SMEs. As a successful producer told The New York Times (Kurutz, 2011): In the past, his firm would have risked its own money, hired a manufacturer and hoped for enough retailer and consumer interest to turn a profit, or at least break even. "The beauty of Kickstarter is it does away with that whole model.", he said.
Crowdfunding reduces the producers’ uncertainties in producing a new product. Crowdfunding also allows producers to lock in demand ahead of production (Friedman, 2013). If they do not lock in demand before incurring the production cost, they would be risking their investment should a bigger, more established rival get a similar product to the market ahead of them, and at a lower cost. Having secured the pre-orders placed them at a less risky position (Sayedi & Baghaiey, 2017).
FirstBuild is a well-known example of a successful Crowdfunding project run by a big company; FirstBuild is a subsidiary of General Electric. In July 2015, FirstBuild launched a Crowdfunding campaign on Indiegogo for a countertop nugget ice maker, the Opal. The project was very successful; The Opal ranks ninth in Indiegogo’s top 10 list of campaigns that have raised the most funds in 24 hours, and the 13th fastest to reach the half million dollar mark. While campaign’s funding goal was only $150,000, within a month the firm had raised nearly $2.8 million from over 6,000 funders. In an interview, FirstBuild Director Naturajan Venkatakrishnan highlighted the importance of the crowdfunding effort: ‘‘the benefits of launching a new product like Opal using the Indiegogo crowdfunding platform allows us immediate feedback on market acceptance’’ (Freeman, 2015). The Opal become available for purchase in regular stores. General Electric used its Indiegogo crowdfunding project as a test market to evaluate the potential demand for its product before committing to wide-scale distribution (Brown, Boon, &Pitt, 2017).
Crowdfunding is very well suited for gathering valuable data from the future/potential customers on what changes could be made to the product to make it more attractive to the market (Gorshkov, 2011).
Ultimately, if the project does not succeed to raise the necessary funding, it serves as a signal to the entrepreneur that there might not be enough demand for her offer (Gorshkov, 2011).