Crowdfunding tips from Helen Lay of Crowd Supply

Crowdsourcing has become a favorite for independent and open-source hardware creators hoping to turn a good prototype into a polished product. But many projects often fail along the way for non-technical reasons.

Helen Leigh Director of Business Development at crowd supplya division of Mouser ElectronicsCrowd Supply is a crowdfunding site for small hardware manufacturers creating new products. spoke to leah ieee spectrum About what makes a crowdsourcing project successful and how Crowd Supply is trying to help.

What are some of the biggest mistakes applicants make?

Helen LeighHere’s a big one: setting your price too low. Engineers only focus on the cost of the product and bill of materials, right? But logistics is expensive. Putting your product on the shelf, unloading it, putting it in a box, putting a label on it, all of it.

The second is when people say they have created something x market, but they have never talked to a single person in their target market. We advise people not to throw themselves to the wolves of Reddit and social media.

How does crowd supply help applicants?

leh: We help with all the non-engineering parts of bringing a product to market, including financial spreadsheets, fulfillment guidance, and product photography. If a campaign is successful, we usually place an order for at least as many homes as were sold in their campaign, which is paid for in advance. But what has become very important in the last few months is the focus on compliance. incoterms Now are really important.

What are Incoterms?

leh: Let’s say you were making some watches in China and shipping them to our warehouse in Texas. What happens if the boat goes down? Who takes that risk?

In the past, the term we mostly used was DDP: Delivered Duty Paid. This is where a manufacturer is paying all the taxes and duties, getting everything into our warehouse free and clear, and we take it from there.

But in that scenario a tariff comes in and suddenly you, as an indie creator, have to pay a lot more. You’re probably losing money now, which could destroy you as a creator, right? One way to bear the burden of risk is to offer FCA (Free Carrier) IncotermsWhich basically means we pick it up from your assembly location and it becomes our responsibility, including freight and tariffs.

What impact are you seeing from the tariffs?

Leh: There are delays, of course, but the tariffs haven’t stopped people from making stuff. I truly believe we are in a golden age for indie developers. Thanks to companies like Adafruit and the Raspberry Pi, we have more options than ever, plus technical education and documentation has never been better or more accessible.

One silver lining of the tariffs is that designers are now forced to take the entire supply chain into account, which ultimately makes their designs better.

What’s your favorite crowdsourced success story?

leh:The most obvious one would be SlimeVRThey make trackers that go on your body for virtual reality. They raised US$7.6 million, so they are very successful financially, but the way they have managed their community inspires me. They have talked openly about how important community contributions have been to their software stack. This is a good example of what opening up your hardware can do.

This article appears in the November print issue as “Helen Leigh”.