Start-up designers look to crowdfunding to raise money

Designers are turning to crowdfunding to realise innovative creations that can then be put into production with limited risk to them

PUBLISHED : Wednesday, 07 May, 2014, 4:43am
UPDATED : Wednesday, 07 May, 2014, 4:43am

Max Gunawan, a San Francisco-based architect, realised at the end of 2012 that he had lost touch with his creative side. So he quit his job at The Gap, where he had been responsible for the design of its international flagship stores, and launched his own product.

By February 2013, Gunawan had created the Lumio, a portable, rechargeable lamp that resembles a slender wood-encased book: simply open it up all the way and the "pages" illuminate.

Gunawan put the project on Kickstarter to see how people might respond to the idea. Within a month, despite having sought only US$60,000 to begin production, he attracted US$578,000 and several thousand orders. Today, Lumio is a self-sustaining business, with back orders and distribution in Japan and Hong Kong before the end of the year.

The story behind Lumio is one example of new design companies whose initial success can be entirely linked to crowdfunding. Through platforms such as Kickstarter and IndieGogo, ideas for furniture and accessories that were once nothing more than a design sketch can be fully realised with limited risk to the designer: members of the public pitch in as much as they like, and if the designer raises what he or she needs, the item goes into production. If not, the money is returned to the "investors".

"We used crowdfunding for two reasons," said Natascha Movisi, general manager and co-founder of Stuttgart, Germany furniture-maker Movisi, which used Indiegogo for her campaign. "Yes, we wanted to raise money to manufacture a new product. But also, before we invested in it, we wanted to see if the market liked it. There is no point in making something that nobody wants or needs."

Movisi and her brother Aleks, with whom she runs the company, had come up with an ingenious idea for a modular shelving system they called Build - a five-sided component made of lightweight high-performance plastic that can be stacked together in a multitude of ways to create comprehensive shelving, storage, bookcases, additional seating or room dividers. They can be covered with a lid to transport stuff - including edibles for an impromptu picnic. Movisi needed US$100,000 before she could start production; in two months, she had US$110,000. Investors were able to pre-order the shelving in units of three, six or 24 at a discount. Each Build piece now sells for about €50 (HK$538). Shipments started to 26 countries a few months after the campaign closed.

"Crowdfunding really pushed our brand," she said. "To raise the money we needed, we chose a route that is consumer-centred, and we really worked on the campaign, on making the video, the financial analysis and social marketing. We developed a product that is different, but even if you have the best product, you have to really work at getting it seen."

That would appear to be the biggest challenge faced by young and even more established design brands eager to introduce something new in a saturated market. Kickstarter and Indiegogo typically have "campaigns" for thousands of different products at any one time.

Gunawan said he was "thick-skinned" when it came to promoting his campaign for Lumio. "People think you put the video up, write the copy, and hope people will see it," he said. "It doesn't happen that way. There's a lot of groundwork involved."

A month before the campaign, he e-mailed 500 people he knew and told them about his plans for Lumio.

"The idea is to build a following prior to launching," he said. "On the first day, you already want them in on it."

In his case, investors put in from US$5 to US$5,000, each contribution bringing its own "reward". Smaller contributors got bookmarks and tote bags, while those who pledged US$85 or more had the first deliveries of Lumio at a discount. (It retails for US$160 today.)

A casual glance through the interior design-related projects on Kickstarter indicates a wealth of ideas that people want to help bring to fruition: The FreedMan Chair, by Britain-based osteopath Simon Freedman, is pitched as the only chair in the world that mimics the act of standing, easing pressure on the spine; the Bloom Blanket is a wool blanket inspired by the art of origami and Bulbing is a lamp created like an optical illusion - it looks three-dimensional, but is only five millimetres thick.

Still, for every lucrative crowdfunding campaign, there are hundreds of others that never receive traction. Designers who have been successful at raising money say the key lies in preparation before the campaign: create a fun and compelling video and have interesting "rewards". But, of course, the innovation of the product is everything.

Perhaps among the most well-funded design products that came to life as a result of crowdfunding is the Porthole, a striking round glass vessel - reminiscent of a porthole in a ship - created by Chicago-based design studio Crucial Detail.

Owner Martin Kastner had originally created the Porthole for The Aviary, an upmarket restaurant in Chicago that used them to prepare tableside cocktail infusions. Once patrons at the eatery saw the product, they started calling Kastner.

"A couple of hundred people called in a month," said Kastner. "We figured that for every person who called, there were five who were interested but didn't call and that there was probably enough interest to produce a short run of them."

He took to Kickstarter hoping to raise US$28,500. In a month, more than US$700,000 had been pledged.

"The original scope of the product was to make a few hundred pieces," he said. "Suddenly, we were looking at thousands." Kastner has since expanded his studio space and hired more employees. He is in talks with distributors in Canada, Australia, Japan and Singapore.