I have become fascinated by a story about a new product named Pebble, and how it came about.  Eric Migicovsky had a dream.  He had successfully built one of the first smart watches, paired with a blackberry.  Now he had a much more ambitious idea for a really smart watch paired with Android and IPhones.  Despite his first success the venture capital community turned him down.  He was able to raise $375,000 from friends and family, but needed more.  So he turned to Kickstarter.

Kickstarter (www.kickstarter.com) to me is more than a funding site.  It is a wonderful example of the power of the internet to build new communities, rally people around an enticing idea and create new distribution channels that often accomplish disintermediation.  The essence of Kickstarter is that someone describes a project, and people decide whether to send money because they like it — or sometimes because they get one of the first products.  They do not receive equity.  Kickstarter projects include movies, public art and innovative products.  The originator declares how much money they need, and the funds are not released to them until that amount has been pledged.

So Eric asked for $100,000 — offering investors only Pebble watches when finally manufactured.  A pledge of $240 got two watches, $550 got five and $1,000 got ten.  He finally cut off the funding at $10,266,845 — pledged by 68,929 backers.   Over one hundred times the amount he asked for!  He had his money, already had his customers and retained his equity.  But Pebble was still attracting other potential investors, so he began accepting pre-orders at $150 per watch.  Tens of thousands more have been ordered.  The funding allowed him to establish high-volume manufacturing from the outset, while he has the first mover advantage.  It also allowed him to utilize some very advanced components that make the product even more compelling.  The first shipments occured January 23, and they are manufacturing at the rate of 15,000 per week to fill the orders already committed. Mine is estimated to ship in March.

This success story fascinates me for several reasons:

1. It illustrates the incredible power of the internet to broadcast an idea
2. Look at the capacity to generate responses, measured in dollars
3. 68,000 people took action, invested, without ever meeting Eric

Eric’s story was well told, and compelling.  It got results — the way only the internet can deliver.  Other Kickstarter stories have not been as successful, and some have completely failed.  A well told story does get results.  Is your story compelling enough to get the results you want?

– Jim Deupree