I’ve been excited about the potential of crowdfunding for quite a while (here and here). The campaign that launched this morning on Indiegogo by Scanadu (developing a Tricorder) is a good example of a campaign done right, and shows the potential of this approach.
- The campaign reached its goal of $100K in 2 hours.
- It’s up to $240K as I write this and day 1 is not ended.
- 1200+ people already pre-bought the product as a result of this campaign, thus doing a great job of validating that (some) people will buy it. Frankly, this is probably more important than the capital.
BUT, …. this is by no means a “typical” crowd funding result. What are the lessons?
Hallmarks of a good crowd funding campaign
I would guess there was a LOT of hard work behind the scenes to make this happen. But apart from good execution of the campaign, here are some hallmarks that seem to me important.
I long ago lost count of how many times I heard about Scanadu. I have a personal interest in the field, and went to the effort to reach out and visit the company a year or so ago. But even for those less directly connected, there has been extensive mainstream press coverage:
Large cohort of interested potential buyers who know about the concept
From the extensive media coverage and the associated Tricorder X prize publicity, and the buzz among the Silicon Valley crowd, the universe of pre sold converts was already large long before the crowd funding campaign went live. The job of the Indiegogo campaign was to convert the converted as a first step.
Presumably, from here the buzz from the campaign over the next 30 days will expand the audience to those who had not already heard about it. But I predict the initial momentum will be key to the success of the next phase.
Sexy concept, Slick presentation
The Tricorder concept captures the imagination. That is why there are 300+ teams working on the Tricorder X prize around the world. But Scanadu has brought a definite touch of Hollywood to the packaging of their ideas and their company.
Invention risk ignored
It’s interesting to reflect that nowhere does one see any mention of invention risk. It seems to be just assumed that this product will “work as advertised”. Obviously, that is always a risk for this type of crowd funding campaign, and I see no problem with that. Basically, one is handing over a bit of money with the knowledge that there is some risk the product may not appear on time or with the desired performance.
But this is a very very different approach to the old days in which one first focused long and hard on proving the technical performance of the product, and only after “it worked” did one bring it to market.
In a way, this is the ultimate example of lean methodology applied to science based products. Because in fact I think there is quite a bit of invention risk in this product. And if it really delivers the performance the company hopes it will be quite a tour de force of technology development.
What we see with the Indiegogo campaign is really customer development at its finest. The MVP* is just a video in this case. And the campaign is testing whether people want this particular MVP.
The answer seems to be a clear “YES”. Let’s hope the company can now turn the MVP into something real that we can all use.
*MVP = “Minimum Viable Product”
- Scanadu asks Indiegogo users to test its “tricorder,” but don’t call it a pre-order (pandodaily.com)
- Here’s a look at Scanadu’s Tricorder, which has raked in $100K in just a few hours on indiegogo (medcitynews.com)
- Scanadu finalizes Scout tricorder design, wants user feedback to help it get FDA approval (engadget.com)
- Scanadu Updates Its Tricorder, Gets One Step Closer to Reality (gizmodo.co.uk)