Bonus Episode: The Truth About Launching on Kickstarter with Khierstyn Ross

Khierstyn Ross is the founder of Launch and Scale™, an e-commerce digital marketing firm that specializes in fast, early-stage growth for online physical product brands.

Through Khierstyn’s work, she’s helped launch and scale multiple 7-figure brands such as Jamstack.io, Aberlite.com, CeresChill.com, and many others.

Khierstyn believes in empowering online product creators to build a business that gives them the freedom to fund and create the lifestyle they want to live on their terms.

In This Conversation We Discuss:

• [00:00] Intro
• [00:58] What Launch and Scale™ does
• [01:31] Launch and Scale is the question Chase always asks
• [01:55] How Khierstyn ended up launching her own business
• [04:47] The crowdfunding landscape is very different today
• [05:19] From crowdfunding to pre-orders/Shopify launches
• [05:58] Clarifying that “Kickstarter” means crowdfunding
• [06:29] Why is product validation important?
• [07:27] Validate products before crowdfunding
• [08:23] Product validation: Small runs
• [09:34] Product validation: VIP programs
• [10:56] The duality of interviewing podcast hosts
• [11:21] Shopify vs Kickstarter on product validation
• [12:04] Weighing in on Shopify and Kickstarter
• [13:11] The downside of Kickstarter being popular
• [15:50] Shopify provides a more controlled launch
• [16:16] Breaking down the expenses on Kickstarter
• [17:37] You essentially run 2 campaigns on Kickstarter
• [17:55] If Khierstyn would choose, is it just Shopify?
• [18:47] Don’t use the Kickstarter model on Shopify
• [20:13] Kickstarter is viable, just know the risks
• [20:39] When should you reach out when you have an idea?
• [21:38] Where to find Khierstyn

Resources:

• Subscribe to Honest Ecommerce on Youtube
• Subscribe to Launch and Scale™ @LaunchAndScale
• Connect with Khierstyn linkedin.com/in/khierstyn
• Using a proven growth system to quickly test, launch, and scale your product through Kickstarter and Shopify, profitably launchandscale.co

If you’re enjoying the show, we’d love it if you left Honest Ecommerce a review on Apple Podcasts. It makes a huge impact on the success of the podcast, and we love reading every one of your reviews!

 

Transcript

Khierstyn Ross  

The second you're serious about an idea. You want to seek outside help, because there's just so much you don't know in the process.

Chase Clymer  

Welcome to Honest Ecommerce, a podcast dedicated to cutting through the BS and finding actionable advice for online store owners. I'm your host, Chase Clymer. And I believe running a direct-to-consumer brand does not have to be complicated or a guessing game. 

On this podcast, we interview founders and experts who are putting in the work and creating  real results. 

I also share my own insights from running our top Shopify consultancy, Electric Eye. We cut the fluff in favor of facts to help you grow your Ecommerce business.

Let's get on with the show.

Hey everybody, welcome back to another episode of Honest Ecommerce. 

Today, I'm welcoming to show, an amazing guest and another podcast host so you should be in for a treat. We at least know how to carry a conversation. 

Khierstyn Ross is the CEO of Launch and Scale™. They help validate launch and scale new products to 6-figure ecommerce brands. 

Welcome to the show.

Khierstyn Ross  

Thanks for having me. 

Chase Clymer  

Awesome. So I kind of explained what Launch and Scale™ was. But how can you dive in a bit more so people know what you're up to these days?

Khierstyn Ross  

Yeah, for sure. So at Launch and Scale™, we help really new entrepreneurs build Ecommerce brands. 

So we do that by helping them launch products using either Kickstarter, Shopify, and then scaling it up by helping them build their audience, really, to 6-figures and beyond. 

But we do that either by partnering with them on the marketing side, or we also have group coaching and an accelerator that helps really trained teams and how to do that.

Chase Clymer  

That's amazing. Because that's like a question I ask every guest on this podcast. 

It's like, after the ideation of the product, --which is something a lot of listeners are always curious [about] "Where'd that come from?"-- well, how did you validate it? 

And it's a very wild west of answers that I always get. So I was looking forward to talk to you about the process that people could go through. 

Khierstyn Ross  

Yeah, I love that. 

Chase Clymer  

So how did you end up launching your own business? Take me back in time, like what was the journey like to get here?

Khierstyn Ross  

Yeah, super messy. I really fell into what I'm doing. I don't come from a digital marketing background or a marketing background. But essentially, I... 

Super quick version of it is I was coaching entrepreneurs out of university, teaching them how to run house painting businesses. 

I did it with a local company here called Student Works Painting. And it ended up really jumpstarted my entrepreneur career. I was someone that knew that I needed to be my own boss, but I wanted to learn business. 

And so from that, actually working across Canada, coaching new entrepreneurs, and taking people with literally no experience and taking them to a 6-figure business level, in under a year was what I got my hands dirty doing. 

And after leaving that, I was in my mid 20s, I ended up traveling. Super lost, trying to figure out what I was going to do. And I decided that I wanted to start my own consulting agency. 

And at this time, I just happened to partner up with the founder of a product back in 2015. And he's like, "Hey, I want to do this thing called crowdfunding." 

And I was like, "No idea what that is. But I have a podcast, how hard can it be?" And we ended up taking that product within 3 months and launching that on Indiegogo, and it was an epic fail. 

We ended up raising like $17,000 out of our $50,000 goal. But if you know in the product space... It was a hardware product, so we actually needed $250,000 to $500,000 to do anything. 

So at this point in my life, this project was dead in the water. But we couldn't understand how a weight-loss product could fail. 

So we decided to go back to the drawing board and see if it was the product that sucked or if it was like the implementation and how we actually did the launch. 

So it turns out, we just didn't know what we were doing. So we decided to get some help launch the product right and we relaunched it 3 months later. 

And where we went from an epic fail to a launch that went viral selling over 5000 units, and $600,000 worth of orders at this point. 

And that change from epic failure to viral hit within a few short months got me talking about what we did differently. 

And that is how I started to get new [clients], [getting] hired by companies to launch products. 

And it was just like one success after the other, after the other, after the other. So that's how I focused on crowdfunding. But where we get to today is... 

It's funny because if you look at my content, I'm actually advising most brands not to go to Kickstarter. And I think we'll be getting into why that happened. But the crowdfunding scene has really changed over the last 3 years with the supply chain.

And it's just being a really oversaturated market that we've actually ended up having to shift our strategy to helping entrepreneurs launch in a way that wasn't as much of an upfront risk and really just to take more ownership over their launch. 

So over the last 3 years, we've been shifting into more of a pre-order focus or just going straight to Shopify to do product launches, as opposed to using a third party like Kickstarter. 

Chase Clymer  

Mm-hmm.

Khierstyn Ross  

So it's been like a wild ride to go from learning how to have multiple 6-figure product launches, into how to take those same principles into applying that to new products through how you validate them, how you build audiences from zero, and how you just do that own brand launch on your own website. 

So it has been a crazy journey. But that's really over the last 8 years how I got here.

Chase Clymer  

Absolutely. So I want to... 

Before we get into it, I really want to clarify real quick. When we're saying "Kickstarter" in this episode, we kind of are using it as a generic term for all of the crowdfunding things out there. You got Indiegogo or Patreon... 

We're just going to use Kickstarter to keep it easy, right? 

Khierstyn Ross  

Yes. 100%. 

Chase Clymer  

Alright. Yeah, because I know that some people would come back to me and be like, "Well, you guys are ragging on this one. What about this one?" 

We're talking about all of them. It's a different... It's just a way to do it.

Khierstyn Ross  

Exactly. "Kickstarter" means all rewards-based crowdfunding.

Chase Clymer  

Okay, so when you were speaking about all the successful launches, you said, because you validated them. 

So I guess let's just dive in there. Why is that important to have a successful launch?

Khierstyn Ross  

Yeah. Okay. So if... For new products, when you look at the cost of developing the prototype, manufacturing inventory, thousands of dollars, even if you want to do a simple product. 

Like a journal, it's a minimum $20k to get that off the ground.

And you have 2 choices: You can either spend your own money to do that, get a bunch of product, and then try to sell it and hope it sells, or you try to validate to mitigate some of that risk. 

And so what you want to do is validate your product before you buy inventory. And what I mean by validate is [to] prove beyond a shadow of a doubt that people will buy your product when you go live with it.

And validating products in the Kickstarter world is more important than ever. Because I found that people are getting into the habit of launching products on Kickstarter to validate their product. 

And I think that with how expensive it is to go to Kickstarter now, and how much goes into the process, you really need to do pre-validation before you commit to doing a launch on Kickstarter or before you really commit to a mass market launch because there's just so much to risk. 

So there are different ways to validate. But it's definitely something you want to do to... 

You have an idea and then you first want to say "Hey, does it solve a big enough problem that people will pay for it?" 

Then "How can we actually run a small controlled test to see that people will actually buy my product?" Before you then go to that next level of mass market manufacturing.

Chase Clymer  

Absolutely. I know that our listeners would be mad if I didn't ask for any more specifics around that. There's people out there that have, what they believe, is a good idea right now. 

So is there anything tactical that you can do like "Go try this." or "Go do this?" 

Khierstyn Ross  

Yeah, depending on how difficult it is for you to get a small run, I would suggest that you get a run of 10 or 20 or 25 units that you either make yourself or you just do a small run from a manufacturer. 

And you pick up the phone and start getting friends and family to start buying that or you start trying to sell that yourself. That is the easiest way to do it. 

I talked to a really smart founder yesterday, who is... 

He has a 7-figure brand. He's already selling on Shopify, but he's bringing a new product to market. 

And he's like, "Look, before I invest $30,000 in inventory. We've ordered 60 units from the manufacturer that we're going to release to our list in a small run and see what the feedback is like." 

That's another way you can do it. Ultimately get a small run and try to sell it. 

And if you can't get a small run because your prototyping costs are too high, then you can do a different level, which is what we do internally is more of like a VIP program where when you go to spread awareness for your product for an upcoming launch. 

You can ask people to pledge a dollar to reserve a bigger discount for the product. And then based on the amount of people that give you a dollar, you can then forecast "Is this enough for us to go to launch with it?" 

So that's like a really common strategy before Kickstarter is to do that; To ask people to put down $1 and then essentially, you want to see about 6% - 7% of people give you $1 to then forecast that, "Okay. When we put more money into this thing, we know that we're going to hit our launch target. We know that there's demand for this product." 

But you're going to see that both ways of validating a product come down to asking people to give you money. I don't think a product is validated when you go to your mom and she says, "Sweetie, that's such a great idea." 

By someone giving their email address to you, that's not validated. 

People vote with their wallets and so you have to have a transaction at some point. 

Otherwise, it's not good enough in my mind to then go and sink $20,000 into a product.

Chase Clymer  

I know earlier, I said that I love interviewing podcast hosts but you make my job so much harder. 

Khierstyn Ross  

I'm so sorry. 

Chase Clymer  

Because you're answering the questions before I can ask them and and now I have to think

Khierstyn Ross  

I can give one word answers. I can be like, "Yes, that's right." and be like...

Chase Clymer  

No. No, you're doing fantastic, Khierstyn. And this is amazing. Because when you mentioned friends and family, I was immediately going to be like, "Oh, they're nice because they have to be. 

Khierstyn Ross  

Exactly. And it's about the money. And it's really fascinating because when I say go-to-market, we can really take the same principles of Kickstarter and apply that to Shopify. 

But the difference is that with Kickstarter, there's more money on the table because you have to build a huge audience. You need to risk a lot of time upfront before you get that back. 

So I would argue that with a Kickstarter campaign, you have to do a much higher level of validation because you put more into the launch itself, as opposed to just going straight to Shopify.

Chase Clymer  

Awesome. Let's kind of dive in there a bit more. We're already talking about the pros and cons of Shopify versus Kickstarter. 

Khierstyn Ross  

Yeah. 

Chase Clymer  

Me, this isn't particularly my area of expertise but I'll kind of let you know what I think about it. And you can tell me where I'm right or wrong.

Khierstyn Ross  

Yeah.

Chase Clymer  

With Kickstarter, you're gonna have a way bigger market to potentially get eyes on your product. But the detriment to that will be they take a hefty fee for those eyes. 

Whereas Shopify, you're gonna get a higher percentage of whatever you raise --like 100%, basically minus fees-- but it is up to you to bring the eyeballs to the product.

Khierstyn Ross  

Yes. And can we dig a little deeper than that?

Chase Clymer  

Absolutely. I don't know what I'm talking about. 

Khierstyn Ross  

Okay. Well no, you've got a really good surface level. 

So Kickstarter takes 5% for a matchmaking fee for every dollar raised on their platform. And then there's a payment processing fee, which is 3%. And so arguably, you need to pay that with any payment processor. 

But people look at Shopify versus Kickstarter and they think "I want to go to Kickstarter, because they have this built-in audience. Why am I going to [choose] to go to my own website when I have to source 100% of the traffic myself?" 

The reality is that Kickstarter has become the most popular platform for small businesses to launch new products on. 

And the way that Kickstarter makes money is they make money when your project is doing well, they make money with popular projects, and when their backers or their customers come back. 

So it's in Kickstarters interest as a business to make sure that they're promoting popular projects because they make money. 

So when you look at the strategy that goes into a Kickstarter campaign, in order to be a popular project and for Kickstarter to show you to more people, --which is where you get that... 

You get discovered by their community and you get that organic traction on the site-- is that you need to prove to Kickstarter you are that popular product. 

And the way you do that is by building an audience before your launch that's actually going to buy your product as soon as you go live on Kickstarter. 

So you have a couple of problems with this. First off, A, it makes sense, because you could put some strategy into ranking on Kickstarter. 

But because Kickstarter has become such a popular platform for new products, the price to get on Kickstarter means that --because there's more projects, there's more competition-- it's harder to rank. 

And because of that, you end up putting in a lot more time and money building a massive audience that's actually going to help set you up for success on Kickstarter. 

So what we've seen in the last 3 years is that Kickstarter has actually let so many bigger brands or startups with deep pockets launch on their platform that it's become nearly impossible for new guys to rank and see success on Kickstarter without spending all like literally $30,000 - $40,000 - $50,000 and building their audience to get that traction. 

So Kickstarter has actually priced itself out of the game, in my opinion, for new sellers because the barrier to entry is so high. It's oversaturated. And because of that, it's... 

To some point, it's more common than not that if you want to raise $100,000, on Kickstarter, you're literally putting in $50k into everything --between the paid ads, the video, you name it-- that you're actually left in debt. 

Potentially not even able to service your inventory and get that out to customers without raising more money. So it has become super, super risky for new brands to go to Kickstarter because of everything that's happened. 

So where Shopify comes into it, is that because you don't need to build up this huge, huge audience to go to Shopify, because there's nowhere to rank on Shopify, you can actually do a more controlled launch with a better budget --with any marketing budget-- and start small and grow over time, as opposed to this mega campaign that can potentially put your startup at risk.

Chase Clymer  

Absolutely. Now, when you're talking about these budgets... 

You said $30k, $40k, $50k to really make something happen on Kickstarter... 

Khierstyn Ross  

Yeah.

Chase Clymer  

...where's that budget being spent? 

Does Kickstarter have an ad network? Are we talking about Facebook, Instagram, TikTok? What are we doing? 

Khierstyn Ross  

Yeah. So $100k, right. And if you assume that you have a 6-figure campaign assume that best case 30% of all those sales is coming from Kickstarter where you don't have to pay for that. 

So then you need $70,000 to find that. Let's assume that 40% of that... 

So say $40,000 comes from the list that you've built up before launch. And that list comes from Facebook, Instagram, Google remarketing, potentially TikTok like paid ads, if you really want to amplify that. But then when you're live, you also have to keep traffic coming in. 

So it's also paid ads during the campaign: Facebook, Instagram, Google to keep that traffic coming in. That's not even to mention, if you've partnered with a marketing agency, that's also taking $20k to run the campaign or anything like that. 

So it's also $5k - 10k for a professionally polished video and any video assets that you need. 

So it's like, yeah. It's expensive to do all that.

Chase Clymer  

Absolutely. And I like that you broke it down like that. And you shared some real world examples of numbers. 

Khierstyn Ross  

Yeah.

Chase Clymer  

And I want to point something out. You mentioned that there's like almost 2 campaigns here: There's a pre-launch campaign where you're essentially trying to get emails or phone numbers, I'm guessing? 

Khierstyn Ross  

Yes. 

Chase Clymer  

And then there's the launch campaign where you're trying to convert those people into sales? 

Khierstyn Ross  

Yes. And then find more people. 

Chase Clymer  

Awesome. Awesome. Awesome. 

So we danced around it. But I want you to take a position here. If someone is going to launch a new product, your position is to do it on Shopify. Avoid all of these crowdfunders?

Khierstyn Ross  

I don't like taking positions, because it really depends. But I will say...

Chase Clymer  

“It depends” is the agency answer for everything. 

Khierstyn Ross  

Yes. But I will say that 9 times out of 10, it is Shopify. 

And 2 categories: If you're an existing brand, you have an existing audience. And your product is a fit for the Kickstarter market. I think Kickstarter is gonna be great for you. 

But if you're starting from zero, you aren't angel-backed, you don't have deep pockets, and you're more conservative, and you don't like the risk associated with Kickstarter, Shopify is a better fit for you.

Chase Clymer  

Awesome. And then so we... Also this was mentioned a little bit earlier, but I want to pull up some clarification here. You're... 

When you're helping these brands on Shopify or advising brands to do this on Shopify, you're not really saying do the Kickstarter thing on Shopify. You're using a different language and talking about it in a different way. 

Could you explain a little bit more?

Khierstyn Ross  

Yeah, so some people think, "Okay, so am I crowdfunding on my Shopify website?" So what that would mean if you're crowdfunding is that you have... 

You use a crowdfunding app and within 30 days, you hope to raise $10,000 for your project. So crowdfunding will give a timeframe and a certain financial amount that you're trying to raise. We aren't doing that. 

What we're doing on Shopify instead is doing a pre-order campaign, which is easier than you... 

On your product page, you say "Pre-order, we'll be shipping in 2 months or something." So you're upfront about pre-order. But when you turn on your store, you're taking orders. 

There's no time limit, there's no minimum or maximum amount that you're trying to raise. 

It's just kind of like, "Hey, we're launching. We're in pre-order now. Order your product. We'll ship in a couple of months. And then when we're in the market fulfilling [orders], we're just gonna keep selling at that point."

Chase Clymer  

Absolutely. Absolutely. 

Oh man, this has been such fun and I'm learning all about this stuff. 

Is there anything I didn't ask you about that you think would resonate with our audience? 

Khierstyn Ross  

No, I think it's... I still really love Kickstarter. I just think that this conversation had to be opened because a lot of brands don't realize this is happening. [Not] brands. 

A lot of new sellers don't know that this is what goes into Kickstarter. And so I was just trying to get the conversation started like, "You have... All my chips are on the table. You now know what goes into Kickstarter. So you can be educated and make an informed choice when you're choosing your launch platform."

Chase Clymer  

Awesome. You mentioned [that] when brands are starting from nothing and getting into this, they need to have a little bit more than nothing. 

So when is it a good idea for a brand to start exploring the market, potentially talking to consultants like yourself about launching a product? 

What is the checklist they need to have before they even start reaching out to people?

Khierstyn Ross  

Yeah. So when you have an idea and you get to the point where you're serious about pursuing that idea, that's when you should start reaching out to people. Because there's different levels. 

There's going to a design firm to see if your ideas are able to be made, or maybe you're modifying something off Alibaba, or whatever. 

But you have to first prove that the product is viable like you can make the product. At that point, you should start building your audience immediately. 

And that is when you should really start to talk to someone. The second you're serious about an idea, you want to seek outside help, because there's just so much you don't know about the process.

Chase Clymer  

Awesome. And if I've listened to this conversation and I'm like "Khierstyn knows what she's talking about and I want to get a hold of her." What do I do?

Khierstyn Ross  

Yeah, so the best place to go would be our website or YouTube. So our website is launchandscale.co. 

Or we've got hundreds of videos on YouTube that you can just either go there for Khierstyn or Launch and Scale™ and you are going to find us.

Chase Clymer  

 Awesome. Thank you so much for coming on the show today.

Khierstyn Ross  

Yeah, thanks for having me.

Chase Clymer  

We can't thank our guests enough for coming on the show and sharing their knowledge and journey with us. We've got a lot to think about and potentially add into our own business. You can find all the links in the show notes. 

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Lastly, if you're a store owner looking for an amazing partner to help get your Shopify store to the next level, reach out to Electric Eye at electriceye.io/connect.

Until next time!