If you look around the Internet right now, the audio-loving world is abuzz with reports from THE Show Newport Beach that was held May 28 - 31 down in Irvine, CA. For me, it was a chance to see old friends, show off Vi DAC and Geek Out V2, and to meet new friends. Many backers came to our room to talk about the subject of crowdfunding.
Whenever this subject comes up from backers of one of our campaigns, there’s only two ways it will go. First, they might tell me how happy they are for (a) shaking things up in the industry a bit, (b) listening to what they want and then incorporating it into the design, or (c) for creating downright awesome gear. Or second, they might tell me how unhappy they are because (a) they’ve been waiting too long for their stuff, (b) we’re stupid and ruining the industry, or (c) we’ll never be able to deliver on our promises.
I think about the subject of why we, as a company, have embraced crowdfunding all the time. I question whether or not we’re making the right move by continuing to do it. I weigh the pros and cons, discuss it with our staff, and even talk about it with my wife and our kiddos. Each time I go through this exercise, I always come to the same conclusion: we must keep doing it.
The reasons are clear. First and foremost, the products we develop in concert with our backers (AKA “crowd-designing”) end up being closer to what the market actually wants in a product. Market researchers can talk to me until they’re blue in the face about focus groups, surveys, and market studies, but until someone tells you exactly what they want by handing over a not-so-small chunk of change, you don’t have meaningful market data.
I should pause here and talk a little bit about our latest campaign, Geek Out V2. Unlike previous campaigns, we’re not crowd-designing the product. This time it’s a pure pre-order effort: Geek Out V2 is designed, tested, and ready to go. But we still decided to take the product to Indiegogo because that platform has proven to bring our products to a segment of the market that is largely unreached by traditional audiophile outlets. Further, we get mainstream media attention because we’re on Indiegogo-- we never would have found ourselves in the pages of The New York Times, The Wall Street Journal, Forbes, or Entrepreneur had we not been on Indiegogo first. This kind of attention is good for us, and it’s good for our hobby.
Are there drawbacks to using crowdfunding the way we do? Absolutely. The biggest one is that we’ve faced is unhappy backers that have to wait a long time for us to develop the product they’ve helped us to design. We typically can turn a crowd-designed idea into a real product in about 12 months, followed by several months of shipping them all out. Believe me, that is a fast turnaround! But waiting for a year for something you paid for already can be a tough pill to swallow, even though you’re going to end up getting so much more than you originally wished for. Remember Geek Pulse? During the campaign we added a half dozen features that we didn't charge anything for-- we just wanted to make it better. For details on that, see Larry's previous blog post.
What Kind of Geek Are You?
Super Early Adopter Geek
First, if you consider yourself an early adopter, crowd-designing may be for you. But ask yourself this before you back one of our crowd-designing campaigns: Is it worth is to me to have my opinion heard and incorporated into a forthcoming product? Am I willing to wait over a year to actually get it? If you can honestly answer yes to these two questions, joining one of our crowd-designing campaigns might be a good idea for you. You may wait a while, but you’ll get a very low price on the product and it will be exactly to your taste.
Second, if you are not an early adopter, you may not want to join in on crowd-designing. You may want to jump into one of our pre-order campaigns (like Geek Out V2). Ask yourself this: Am I willing to pay a little more for something that is sure to please just so I can get it within 60 days or so? If you can answer yes to this question, you should definitely consider hopping into our pre-order campaigns.
Lastly, if you have no patience for crowd-designing nor pre-ordering (which I completely understand), just wait until the product reaches retail stores. At that time, you’ll pay more, but you get immediate satisfaction.
It was great to see so many of you at THE Show. Whatever your opinion on our use of crowdfunding, I hope you now have a clearer understanding of our use of crowdfunding platforms like Indiegogo and Kickstarter. They’re going to remain a very important part of our business for years to come. I’m hopeful that as more high-performance audio companies embrace crowdfunding (we were the first, after all) our way of doing things will be better understood.