Presenting at a DC Lean Startup Circle Thursday evening, the two D.C.-based cofounders of portable kegerator company Hank the Beer Tank had lots of advice to impart on crowdfunding.
That’s because they’d just failed at it.
“We successfully launched an unsuccessful Kickstarter campaign,” said business head and cofounder Sebastian Ehreiser.
And that’s what the dozens of absorbed entrepreneurs crowding UberOffices Dupont had come for: The battle scars, the unvarnished truth, the warts-and-all tales of founding and living to fight another day.
The duo delivered.
First, “We drank some beer,” said Adam Koeppel, the Hank the Beer Tank cofounder and engineer. Then, they thought: “Wouldn’t it be cool if you could bring draft beer everywhere?”
From there, they retraced their steps from creating their first MVP to pivoting away from the solar-powered generator to the media attention to the failed round of crowdfunding.
Every month, the DC Lean Startup Circle meetup offers entrepreneurs-in-training a peek into another startup’s successes, and a chance to learn from someone else’s failures.
Founded in 2009 by angel investor Kevin Dewalt, the group initially consisted of a handful of entrepreneurs. They would congregate at bars to “understand what [lean methodology] is, how to apply this stuff in the real world,” explained Lean Startup Academy founder Peter Oliver-Krueger.
But, added co-organizer Jason Nellis, the group, now at 4,000 members strong, has reached a more general audience — a reflection of a growing startup scene. “We’re not just a bunch of ragtag people who have ideas anymore,” he said. “Now, we’re a community that’s much more established.”
Now, here’s the advice from the Hank the Beer Tank guys:
- On knowing your audience: Get ready for surprises. “Our core consumer, like, lives in Nebraska and hangs out at tailgates and is nothing like us,” said Ehreiser.
- On Kickstarter campaigns: Keep it simple. “There’s nothing about Kickstarters you can’t handle yourself,” said Ehreiser. “Don’t pay anyone.”
- And the video: Not too polished, please. “In our videos, it’s just us hanging out and drinking beers,” said Ehreiser. To connect with your early adopters, “the authenticity is important,” he added.
- On building your MVP: A basic prototype can look much better with some basic polishing. “Once it’s done, you paint it,” said Koeppel. Of course, that doesn’t really matter at this stage. The first kegerator he made — in one weekend — was “ungainly and awkward, but it was functional.”
- Take your time gathering feedback for a hardware product: Whereas “for software, you can try something and switch it around,” said Koeppel.
- If you need to scale above a certain amount to succeed, go with Kickstarter: If any extra dollar in your bank helps, try Indiegogo. The platforms also offer different levels of visibility. “Indiegogo has half the footprint as Kickstarter,” said Ehreiser.
- On business plans: “Rule No. 1 with starting a business, don’t do a business plan,” said Ehreiser. “It’s going to change really fast.”
- On equity agreements: A 50/50 split might get messy. “There’s two ways you can look at equity,” said Koeppel. “One, is financial reward. One, is control.” Avoid a deadlock situation.
- Engineers matter: “Your engineer is by far your most valuable asset,” said Ehreiser. “Respect their time.”
- On an optimistic note: A failed Kickstarter can be the launching pad for a huge round the next time around, when a base of supporters has already been established. So, Koeppel said, go “turn that non-success into the foundation for success!”
Knowledge is power!
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