Is Your Dream Worth Realizing? A Checklist

Tip of the Week

Like most of us whose minds tend to dream up ideas for products and services, or have alternate points of view that we believe will make the world in some way a better place, we also have to beware not to run too far with our brilliant idea before we make sure it’s as original as it appears to have been when we thought it up in the shower or in the middle of the night as we groped for our bedside pad of paper and pencil in the dark. (Phew, that was a long sentence!)

I  came across a campaign today called Quell. It’s a pain-relief wearable device.

I thought it was worth highlighting it because to dissect it is to understand why it’s doing so well. It reads like a due diligence checklist. In other words, these people did their homework but more than that they have a great idea. So I invite you to check out the campaign and look at the video, which I’ve embedded below.

Based on their campaign, I’ve assembled a checklist. Here are some questions to ask yourself before your brilliant mind carries you away into the crowdfunding space. These guys will help you understand where and what makes your concept work and how.

FYI, I have no investment of any kind in them except my kindred hatred of pain.

Is your idea itself in considerable demand?

Who wouldn’t honestly do just about anything to avoid physical pain? Pain sucks. Pain debilitates. Pain is eating up an enormous percentage of the population 24/7, at least in part due to our stressed-out lifestyles, our unhealthy relationships to work, and the physical, mental, and emotional fallout from all our shiny technology. Oh, and our terrible eating habits.

Excuse the expression but this campaign touches on a vital pain points that pretty much all of us made of flesh and blood have some negative relationship with. That’s not to say that everyone will jump on the idea of this device but enough will because of personal experiences with pain.

(Okay, I just broke ankle so I know from pain. I will speak more on THAT topic once I’ve wrapped my head around the fact that the break is real; it’s not going to go away for a few months no matter how much I wish for it to, or search for some sort of supranatural rewind button.)

Does your idea or product cause no harm and does it really put the benefits to the audience front and center?

That may seem like a no-brainer yet many campaigns lack that crucial selling point. It’s not enough that you think your idea is so amazing; show us why we will think your idea is so amazing. And I mean really show–and tell. Don’t kid yourself with I’m-center-of-the-universe attitude—an unfortunate side effect of just how easy it is to get your name out there via social media. I see too many campaigns that think this is an effective tactic. Go figure.

One of the great selling points Quell provides is that the delivery system is 100% drug free. This is important because people care about staying healthy—and they care about getting healthy without the use of nasties like Oxycontin. Don’t get me wrong, right now Oxycontin is my friend but the drawbacks are severe, and if you’ve got a chronic pain problem it should not be an option…And yet there are not many better options, so this makes Quell sound extremely attractive.

Do you just want to take the money and run?

Lots of campaigns do. But Quell is not only ready to provide its first-generation device; they are also looking to you to help them improve the product. Yes, this is a smart move for them, and it’s hopefully not at your expense if the product proves ineffective, but I think it’s an attractive risk worth taking when you weigh it in the balance of all the work they’ve done so far.

Additionally, and just as importantly, Quell is using crowdfunding in beneficial ways that you should consider when you toss your idea around, thinking about throwing your own hat in the ring: by getting user feedback they will be able to produce a next-generation product that’s even better. Add that to the fact that their success will be enough proof of concept to attract other types of investment, and this diminishes what I just now thought of as “crowdfunding welfare.” It’s not meant to be that.

So make sure your campaign provides a larger service beyond grabbing the dough and leaving us to hope for the best. It will be different for every campaign but please make it a part of your thought process.

Can you support your idea with compelling statistics?

Those that really find success, in crowdfunding and on the internet in general, are those that can exert their expertise by providing quantifiable evidence of a need and then backing it up with an idea or product that effectively suggests it can address those needs. Quell weaves those into the video and narrative and punctuates it with all the media support they’ve already garnered, which is a kind of statistic in itself:  “Wired,” “Entrepreneur,” and “Bloomberg” and many more publications thought enough of it to write it up.

Does your idea have any type of standard against which it can be held up in order to support viability?

Considering all the concern over fraud, the fact that Quell is able to say the FDA cleared it for takeoff is great. As crowdfunding backers become more and more savvy, and perhaps experienced a burn or two, some sort of credentialing is going to be important. Again, this will be different is all cases.

Here’s an example, of how a filmmaker might gain credibility if they are a newbie and have no past films as evidence of their talent:

  • Former students can get their professors to vouch for them with a testimonial
  • You can ask a mentor who has a good reputation in the film industry
  • If you’ve worked for a highly successful filmmaker, as a gaffer or second AD, see if they wouldn’t give you the thumbs up to burnish your campaign.

Above doesn’t come close to itemizing all that you should be asking yourself before you launch what you think is your good idea. And if you do the exercise honestly and fail to live up to your newly developed high standards, so be it! That’s good information. There’s still hot water in the shower and keep that notepad on the night stand and you’ll get there in time.

The Crowd vs. Investor Due Diligence? The Crowd Wins

This is a repost from my LinkedIn blog. I will be adding posts that pertain to crowdfunding here on The Crowdfundamentals blog, in case you miss them the first time.

Have you heard about Clinkle, the mobile app created by the 20-something techie golden boy, Lucas Duplan? The wallet app was touted to utilize a high-frequency sound to transmit money between users in close proximity.

Silicon Valley fawned over its simplicity, intuitiveness, and primo user interface. There were gamification elements, social rewards, and even a philanthropic component that allowed users to seamlessly donate cash or perks earned to good causes.

Savvy VCs, not least of which included Virgin CEO Richard Branson, threw money at it—to the tune of $30 million. It was the largest early investment raised in Silicon Valley’s history.

While Duplan spent lavishly on “culture-building” parties and fancy digs, the app stayed in stealth mode for three long years. Yet no one openly questioned why. Until last November when a former Yahoo and xAd exec was hired and quit after only one day. Duplan is now under fire for deceitful practices because it turns out that the actual product being developed has fallen short of what the demo led everyone to believe it could do.

For those who have been following some of the investigative reporting on possible crowdfunding scams alleged to be perpetuated by Healbe GoBe, the calorie-counting watch; and TellSpec a hand-held food-scanning device, both of which have scientists raising eyebrows, there are some interesting contrasts to be drawn between how quickly the Crowd complained about a fishy odor wafting around online, and the glacial pace at which the sophisticated VCs, the angel community, or employees caught wind of Duplan’s duplicity during many face-to-face meetings with him.

In all cases, the jury is still out on whether Duplan or the crowdfunding projects, which were delivered heavy payloads by backers, will make good on their promises.

But in the case of Clinkle, depending on when you start counting it took anywhere from nine months—which was when the investors kicked in millions—to three years—which is when Duplan first started shopping his app around Silicon Valley—for anyone to realize that the app development was not progressing.

Compare that to the 15 days for red flags to be waved at HealBe by PandoDaily, (their first piece appeared on March 20) and exactly two days for the first complaint to hit a forum about TellSpec. (That campaign started October 1, 2013 and this ran on October 3.)

A lot of criticism has been lobbed lately at platforms like Indiegogo and Kickstarter for a lack of transparency in their vetting processes and an unwillingness to interface with critics who demand accountability when issues do arise—and for good reason.

Unlike investment deals in which investors are responsible for due diligence, crowdfunding is supposed to stand on pillars like transparency, engagement, accountability, and follow through. Each project creator is asked by the platforms to abide by them. But whenever a domino falls the other way, and the platforms are asked to do the same, they hem and haw or say too little , too late.

Wouldn’t the platforms be serving themselves and the crowd so much better if they acted in accordance with their own guidelines? Which, by the way, should be expanded and specific as opposed to using such general language as to conveniently leave them enormous room to interpret as needed.

Shouldn’t the platforms be much more transparent about exactly how their vetting process works?

And with the enormous sums of money these platforms raise everyday—Kickstarter recently boasted passing the $1 billion mark— shouldn’t they be throwing money at hiring real eyeballs to focus on it?

Remember, unlike the Clinkle investors, the crowdfunding backers continued willingly to give money to Healbe and Tellspec, even after news of possible malfeasance had begun circulating widely, because they understand their dollars don’t fetch equity shares and are willing to take the risk.

Given all that, I don’t understand the reticence and pushback from founders. We really do trust in the wisdom of the crowd to find the scofflaws. All we ask is a little support from the big guys we’re keeping in the green.