$1.2 Million On Kickstarter? Here’s How SmartThings™ Did It (A Behind The Scenes Breakdown)

Clay: Hello everyone, my name is Clay Collins and on the other end is Ben from SmartThings. Ben Edwards is one of the co-founders of SmartThings which recently has taken Kickstarter by storm. They are in route to do — in my opinion they are going to probably hit at least a million dollars. They’ve had a really amazing trajectory. Ben thanks so much for being here.

Ben: Well thanks for having me.
Clay: So, you know I would like to hear about the anatomy of this Kickstarter campaign and the play by play of how it happened. But before that could you just give me a little background on SmartThings? When it formed, what kind of corporate structure you have and just kind of what the origin story of it was because for everything I can see points to the fact that you guys have been thinking about this for quite some time. You hit Kickstarter over the very well developed idea. So I’d love to hear a little bit about that.
Ben: Yeah, well we really had the idea for it and Alex Hawkinson one of the co-founders and the CEO he sort of brought it for us. We knew we were going to do something together as a founding team. We didn’t know what it was going to be or when it was going to be. We thought maybe by early 2013. Turns out January of 2012 he’s got this idea. We talk about it a bit. We all are excited about it as a space. It’s interesting. It’s not just software. We had just come out of another… Start Ethic had been acquired. We had a [Inaudible 0:01:58] through all that. We were a little fatigued [Inaudible 0:02:01] business to business space. So we were like this is great. Let’s take it to consumers. We don’t know a lot about it so it’s challenging and yeah, let’s give it a try.

So from January to about April we brainstormed. We thought about the structure of it and then in late April we incorporated. So I think it’s classified as C core and there are seven co-founders as I mentioned which is many. I would say it’s probably far too many in general, but for a big venture like this it’s been great to have so many people.

And so since April we’ve really been trying to get the software down. Test the hardware out really proof of concept, can it happen? And then we made the go, no go decision sometime in July that we were like yeah, we definitely are going to kick start this, we can do it and yeah, it’s been going from there.

I sort of chuckle at the notion that we had a well thought out Kickstarter marketing campaign because we are totally doing this like in terms of we’re just like learning on the fly, we’re reacting, we didn’t know what to expect. I mean, we’ve backed a lot of projects cumulatively, but none of us had ever done one before. So it’s very interesting.

Clay: Cool, cool. So actually just as — I’m going to edit this out, but if you have Dropbox going or even a lot Chrome sucks a lot of bandwidth and there’re a couple of spots there where you are cutting in and out. Like if you have Google Drive or anything that could be…
Ben: That started it. So I paused it for two hours so that should be good Dropbox as well. All right, sorry about that.
Clay: Yeah, yeah no worries, no worries. So seven co-founders, that’s kind of a lot. Why did you decide to go with seven co-founders? And I would just love to hear a little bit about how you guys all met. I was kind of looking up all the co-founders and you’re really from a lot of different parts of the country. It almost seems like you’re a virtual company on the onset. I guess I saw like maybe there’s a total of three of the seven from Minnesota, but otherwise you guys are pretty broadly spread out. How did you all meet and what was the genesis of this?
Ben: Alex sort of has dual residency I’ll say. He’s got a house in uptown. He lives there during the summer. And he — I don’t know how many years ago it was now, he and I met at a mini demo. So we had to do a project for him, two week contract, turned into a four week contract, turned into a two year deal, turned into an acquisition. So we’ve been working on and off with Alex, mostly on for about five years, four years. And with Alex came the team of James and Jeff and Andrew who are all of the other outer state founders.

They’re spread out between Dallas, LA, Connecticut and DC right now. There’s some thought that we might melt them together in some way, but we’ve got quite a bit of a nurture here in Minneapolis for development. It’s not just the three of us, Scott, Jesse and myself, we’ve also got other people on the team who are working here. I think there’s about 17 of us or 18 that have been working since I think for the last month or two.

Clay: Wow. So primarily your expenses have been your time. Have there been any other like significant expenses going into this Kickstarter launch or has it just primarily been time? And who donated that time and sort of how were those resources allocated? Because I know that legally when you’re getting paid from one source and you’re putting that into another that seed corporate at some point is going to need to make reimbursements. And there’s a number of assets it looks like that have gone into creating this Kickstarter campaign. How has all this been paid for?
Ben: Right, well you’re right. Most of us have been putting in our time. We all do have other commitments that we’ve been working on as well every factor. For example Paice, Scott and Jesse and I we contribute to a factor in multiple ways. So but yeah, in the other time that we have for SmartThings, we’ve been contributing to build equity based on sweat equity and then also we all put in some cash as well. Because this is a cash heavy business to get started. It’s much more that software. We had to put the hub through certification, FCC certification and each time we do that that’s like 35 grand. So it’s not a cheap thing to do, but we’ve been able to do that, we’ve adding some contractors. So all that required some money. So far we’ve had only one outside investor and then it’s all been us.
Clay: Wow. If you’re open to sharing, can you share with us how much SmartThings has cost so far?
Ben: I am not positive of the numbers, but I believe we’ve put in cumulatively right around half a million.
Clay: Ok, wow. That’s impressive. Okay, in terms of the equity split, are you public at all about that? Is that just split evenly seven ways or not?
Ben: We’re not all equal, no. Alex has a bit more skin in the game.
Clay: Ok. And Alex is the one who appears in the Smart Thing’s video?
Ben: Yes, yeah.
Clay: Ok, cool.
Ben: He’s had a few more wins than the rest of us. So he’s got a little bit better chance of throwing in some money.
Clay: Ok. So that was based primarily on initial investment or network connections, or was that purely just like he’s putting in more money initially so he’s going to get a higher percentage? Is that how it works?
Ben: That was pretty much it, yeah the financial part. We’ve all been putting in the same amount of time. We’re all valuing our time the same, just that.
Clay: Cool, I appreciate you sharing that with us. So let’s fast forward to SmartThings and the Kickstarter campaign, which is I think when the world started to really know about you and what you’re doing. Could you just briefly maybe about 60 seconds or so share with us what SmartThings is and why you believe people are so excited about it?
Ben: All right. It’s a couple of questions, but so the basic premise is that we’re building a platform so that things in the real world and things in the digital world can connect, interact and provide basically automation, monitoring and joy for the uses of it. The one problem I would say with the platform is it can do so much. We have a hard time narrowing it down and saying this is the problem it solves or this is the problem it solves. It can solve so many. But if I were to say where it could be disruptive, I would say home security is an example where it could be disruptive in that you can have a monitoring system that doesn’t require power or internet connectivity to alert you to when something is wrong.

There’s always been the dream of maybe walking to my house my house knowing that I’m there and doing things for me and we’re hoping to realize that dream with the use of a small presence tag. It’s basically the size of three quarters stuck on each other. And I’ll just carry it in my pocket or hopefully ideally it would be my phone and my phone will just know that too. But we’re working on that. But I could walk into a room and when I do the music could come on how I want it, the lights could go how I want it, various things like that.

Clay: Cool. So basically it’s a platform where things that exist in the real world can connect up to the internet and people can build software and devices that facilitate home automations and things of that nature?
Ben: Yeah, I sort of like to think of it as life automation more than home automation, but it’s really — like you said, home, office, you have a hub, you have some devices like motion sensors or contact sensors where you can tell something’s opened or closed, those proximity sensors that I mentioned, temperature sensors, all sorts of things; water sensors so that you could tell whether there was a leak. All of those things could end up being used in conjunction be set up as really as compound devices. So when motion is sensed here turn on this camera over here. Send me a text message that there’s been something with a picture of it. [Inaudible 0:11:26]. A very easy thing I think that we’ll be able to [Inaudible 0:11:35]. Also things like hey when the weather forecast [Inaudible 0:11:42] calls for rain… Did I break up there?
Clay: Yeah, just for maybe 10 or 15 seconds.
Ben: All right.
Clay: But, okay so let’s break down a few scenarios here because I think there’re some really good ones in the video. So in the Kickstarter video there’s an example where someone gets out of their bed in the morning and that triggers the coffee to turn on and maybe the shades to get paun. So how would that work? Is it that there’s a proximity sensor that detects that someone has left the bed that reports back to the hub, your wireless hub which then sends a signal from the hub to the coffee pot using maybe some built in automation rules or it’s kind of like if then that or kind of like — is that the message?
Ben: Yeah, so I have ttt.com. It’s been a pretty good inspiration for us. I think we envision scenarios where it’s just as easy as that to put together sequences with the hardware and software. And the one that you’ve mentioned like maybe the child getting out of the bed, we had actually envisioned that being a pressure sensitive matt because it’s like under their mattress. So we had [inaudible 0:13:07] they’re in. So once they get out maybe turn the lights on in the bathroom or illuminate a trail of night lights for the bathroom. Or the coffee pot it’s an example. That’s the kind of a stretch right now that we will have to sort of either convince coffee makers to build the module in, which is very small and they could do it or a hacker could just do it. Or you can plug it into an outlet and have it all set up and then just once it turns on it comes on. There’s a few ways to do it but ideally you’d have it all controlled with the radios that we’re using. Which [inaudible 0:13:44] for the pick nerds out there.
Clay: Cool. So another scenario is a dog leaves the yard and the dog owner gets a text message. So again that’s based on a proximity sensor sending a message I guess early enough that it can get back to the hub that there is no longer proximity detected and then the hub sends a message to the cloud and the cloud sends a message to an iPhone app or an SMS service that lets the owner know that the dog has left the yard. Is that kind of how that works?
Ben: That’s exactly it. Yeah and you know we thought of like well you know if a dog and we both have these proximity tags and we leave the yard together, like going on a walk it wouldn’t do it. It would know that. It’s like there’re together and let’s not worry about it. But if the dog leaves without me then yes we could get that.

And there’re still some things to work out in terms of do we create like a geo location fence or do we do something? But at its basic rule it’s like hey if you leave within X feet of any of any of the hub or things, because all of the things
are also repeaters. So you could have a thing on each corner of your house or each corner of your yard and it could ostensibly act as that geo fence too. So still some things to work out but that’s the goal. That’s one of the biggest things that I want. Just my little tags on my dogs so I know.

The other thing that’s so funny is people want to know if their garage door is open or closed. We’ve got that a number of times and we think we can facilitate that really easily in terms of knowing whether it’s open or closed. And then it’s a question of can we shut it then for them and [Inaudible 0:15:32].

Clay: Cool. Okay, so now that we understand the concept, let’s get into the Kickstarter campaign. So, a couple things about this. I thought it was going to do well. I did not that it would do as well as it’s done. And one of the reasons why is because I think you guys focused on a lot of different applications and there was a part of me that was kind of questioning whether or not the world was going to get excited by a platform as opposed to, here are two scenarios and we could scale this to a number of different scenarios. And I’m really glad that this took off like it did. And immediately it seemed like the tech media was on top of this. So whenever I see that happen I wondered was it something that’s organic in terms of the tech media being on top of it or did you have pre-established connections or would you say it was a little bit of both? How much did you guys as a team have to do with the tech coverage that you almost immediately got?
Ben: Well, we knew that we were going to have to pursue the tech coverage, not just wait for it to come. We had a list of places to go, where to tip people or whatever else, but we also knew that prior to the campaign [Inaudible 0:17:01] a few key people who were interested in it including Kevin Ross who were going to tweet about it, which sounds like kind of funny, a tweet to one person. But a tweet to one person with about a million and a half followers who’s been in the position that he’s been in, that sort of got people to give us a little of credibility.

So I think that the media coverage has been good. We’ve sort of been half and half. We’ve been working it and it’s been happening organically. There’s still a few hold outs out there, tech crunch, but we appreciate all the coverage.

Clay: Sure. Did you find that there was maybe was one thought leader or one influencer that tipped the dominos that alerted everyone or was it really just like one person here telling another person? Was it Kevin Ross that really started everything going or was it a little bit more fragmented than that?
Ben: Well, I think he definitely helped that first day to make that day a success. I could probably attribute at least 50,000 followers directly to that tweet. I’m not talking about indirect effect. So I think that was really huge. I think it was cool. But yeah, it’s really been more distributed. A lot of people are talking about it. We’ve seen individuals show interest in it who are in high positions. Like we’ve got backers who are like editors in chief of [Inaudible 0:18:34] or they are people who do podcast about technology. And so I think those sorts of things are key. Getting the people who are really the thought leaders interested is key.

And I think one of the other things that as far as Kickstarters goes in the [Inaudible 0:18:46] realms, is that we weren’t the first. There’s been predecessors for us that have primed the pump. I think there’s people on Kickstarter who are used to this kind of product and want it and there’s been glimpses of what our platform is promising in various other projects, but maybe we could just put it all together hopefully in a way that is consumer friendly. Because a lot of the other ones seemed a bit more makery.

Clay: Yeah, I think that’s a really good point. Yeah, no I definitely see with Instacube and with a bunch of others, that’s really I think an interesting trail we could go down at some point talking about some of the partnerships that you’ve done which seem like they’re a first. Maybe they’re not, but I think that’s a really cool strategy. But I think Instacube and like there’s a lot of hind set this integration between the physical world and the cloud and web apps, but there as of yet hasn’t been a consumer friendly platform for it and it definitely seems like you’ve hit on that pretty well.

Just a side note, what kind of analytics does Kickstarter give you? Do they tell you what traffic sources are converting to donations? Like will they be like, “Yeah, you made this much money through twitter or this much through SEO” and things of that nature or is there none of that?

Ben: They do give us some analytics. It’s basically where the source was. So is it outside of Kickstarter or inside of Kickstarter? And then if outside, was it some MGadget? Was it from Match Bull? Those sorts of things, it will give us that. If it’s internal is it from direct search inside or being featured in Discovery or whatever? So that area is a bit of that. They also have a back history level and number of video views and then the number of percentage of the people who watched the video all the way through. It’s definitely more than nothing. [Inaudible 0:20:44] I’ve never heard of anyone who doesn’t want more analytics. But yeah, we’ve had some other things we’ve tried to pile on on the outside of it just to see how many people are signing up for our newsletter on our current site and all that stuff, but…
Clay: That’s awesome. That is so killer. Can you share any surprises in those analytics? I for example would love to hear what percentage of the donations have come through the Kickstarter platform as opposed to coming from outside sources. That would be something that’s really interesting. Do you have that data?
Ben: Yeah, and I will mention that Kickstarter has not featured us yet as a darling project that they like, but…
Clay: They haven’t? I thought they…
Ben: No, I’m hoping that they will still with 10 days to go. But right now there’s been $308,000 pledged via Kickstarter and $403,000 pledged via external affairs. And the average pledged amount has been $201.
Clay: Wow, that’s awesome. So have you found that over time the percentage of contributions backers, the percentage of money coming from within the Kickstarter system is increasing over time or decreasing over time as a
Ben: I think as a percentage it’s been decreasing. So our top number of pledges and number of dollars and all of it has come from direct traffic with no referral information. So that’s like the top but then the next four are all internal to Kickstarter and then the next six are all external. So, Facebook, Encre, mGadget, Twitter.
Clay: Cool. Yeah, I mean my hypothesis and I have no idea if this is true, it sounds like you’re saying it’s false. But my hypothesis would be that initially that big push from maybe the tech press would drive the bulk of the sale. So initially Kickstarter wouldn’t make up for much of it but then over time as you build up within the Kickstarter system you would get more donations from within the system via internal referrals. As in you’re saying that that is not the case?
Ben: I mean it seems right. That’s how I would categorize it as well in just my other experiences with Kickstarter projects just looking from an outsiders perspective. Since day one because we had some early press we’ve always been featured in the popular or the discovery technology sections of Kickstarter and so I think that has really helped. Like you don’t normally have to go more than like two pics in to see our projects and that’s been really key I think. So I don’t know how much of being like a staff favorite or a focus to their email campaign would help us or would certainly help, but I don’t know if we’ve saturated Kickstarter or not.
Clay: Okay, so you’re saying it does seem about right that Kickstarter is sending you more internal traffic over time?
Ben: I think so, yeah. I mean, especially if you can maintain your position of like this week we’re popular. If we had a really big dip and we weren’t popular for one week in technology for example, then it might be harder. Like in games it’s harder to stay up in the top part in games because there’s just so much more games and this is — so yeah, I think technology has a — we’re sort of debating our technology. We’re clearly technology but should we go to design because that seems rather the trendy technology projects just go to design like Pebble for example. But no, we save it to what our roots were.
Clay: Yeah. I would love to — I would think, I don’t know if — I doubt the Kickstarter people are going to watch this interview. But I would love to hear any just you critique of the Kickstarter experience. Obviously you’ve done it in the past and you’re looking forward to doing it again and it linked to a certain amount of credibility to the product because it forces you to be transparent. So those are obviously some good things about it. It seems like press routinely goes to Kickstarter to see what’s hot and for stories to find. So those are obviously things that are great about it, the analytics as well. What are some of the downsides about being on a Kickstarter?
Ben: Well, first I’d like to mention like yeah, like you said there’s no – that we wouldn’t be where we are without Kickstarter. Kickstarter is a phenomenon. I don’t know how long it will last, but I’m glad that we’re here in the heart of it. It’s been amazing to get in front of so many people who are so enthusiastic. One of the things that were an anomaly I think is we have so many comments on our Kickstarter page as compared to like other ones. We have 3500 or so plus backers, but we probably have another 3000 or 2500 comments. People have a lot of suggestions. They’re very into it.

But I think that Kickstarter is suffering from their own success. They can’t keep up. I just get the impression that they’re under water and trying to get their heads up. They’re hiring I think from what I can tell as fast as they can but they just can support the machine that they’ve built. I think it’s very interesting the way that we’ve seen other projects have similar sort of little issues like we had and I just think that’s the case. They’re just super successful and couldn’t anticipate it.

Clay: Yeah, and you know I think there’s a whole new set of questions that Kickstarter has brought forward like what do you do in situations where the ship date is pushed back or the product never gets created and who’s responsible, who’s not? Like it’s a really interesting — I think crowd sourcing is a really interesting phenomenon. Ok, cool well that’s really interesting.
Ben: I think one of the concerns I have going forward for Kickstarter is like they need to try to maintain the this is supporting entrepreneurs more than this is buying stuff. It’s that home shopping network. And I think that should be the focus of their — it should be customer support for the people who are kick starting their campaigns and maintaining the message of what Kickstarter is. I think that they’re losing that battle. I think we aren’t all of us collectively kick starting things are not helping. We are treating it a little bit like customer acquisition and things like that, lead generation and I think it’s important for them to maintain like hey, this is like you’re backing something, you’re not buying something. But it’s easy to get — that sort of gets lost sometimes.
Clay: Yeah, so you’re saying maybe position it less as an ecommerce platform and more as what it originally started out as and still is very much this day but a crowd funding platform and just maybe emphasizing that a little bit more in their messaging in their materials?
Ben: Yeah.
Clay: Cool. So what’s your thoughts with this Kickstarter campaign over time? It seems like you — every single time I think hey, this is becoming not forgettable. Like it’s very significant and especially being part of the Minnesota tech community I watch it. Like go to the page every three or four or so days just to watch the stats. But it seems like at regular intervals new guys are doing interesting things to add interest to this. So you struck a partnership with Instacube where it doesn’t seem like there’s any contracts in place necessarily, but you created a video where you encourage your supporters to back Instacube, which is a pretty popular project and you encouraged — and Instacube people encouraged their backers to support you guys, maybe multiplying the effect of the success of both of your campaigns. How have you found that experience to be?
Ben: Yeah, I mean we happened upon that. What happened is that we found that Instacube launched similar amount of time to us and on the same day as us. They are tracking along with us and we’re like, “Ok, that’s a cool project, it’s android based. It’s a touch screen, which I didn’t feel like they were utilizing that much and now all of a sudden we have a new thing or a new device that is this bigger screen and platform where they could manage their home or the office or whatever. Oh yeah, and they can look at Instagram photos on it too.”

In a lot of ways I think that it’s just an interesting approach to being like really agile. We both had ideas of what we’re doing coming into Kickstarter and then five ten days into it we’re like, “Hey, look at these guys. Let’s talk about it them.” And that really came together in the course of the long Labor Day weekend. We had discussions on Thursday and then by Tuesday we were ready with Leo and Lars, I think maybe Tuesday or Wednesday. So that wasn’t something that we had planned prior to the campaign for sure it just happened like that.

And then other people started coming to us and say, “Hey, we’d like to partner with you. We can do this that or [inaudible 0:30:34] talk and part of having the open platform that we have is that we could say oh yeah, well anything really can talk with our staff using our API or whatever else. It’s another question of whether or not there’s going to be a real strong integration in terms of the thing talking to the hub with the radio. I mean, we really prefer the radio communication over like a Wi-Fi or up to the cloud and then down to the device. But yeah, I mean it’s been nice.

We’ve talked to multiple people. Alex met with the Instacube folks yesterday. He’s out in San Jose or wherever they are. Had a barbeque at their house and then meeting with more people today hoping that before the end of the week we can announce an even bigger thing. But I cannot elude — that’s the only thing as far as I can go on that yet.

Clay: Totally. Is this — because this seems really creative and this type of partnership I’ve seen modelled successfully in so many other spaces but I wouldn’t have thought of this applying to Kickstarter. Is there precedent for members of the Kickstarter community who have successful campaign saying not only is our stuff going to integrate, but we’re also going to softly and non-aggressively encourage our backers to support each other. Was that your idea or is there a precedent of that working really well in the past?
Ben: We thought we came up with it, but then having researched a bit we saw that it has actually happened in the past. It’s called — there’s some cross promotional things, Click Track actually. Clicktrack.com has a blog post about cross promotion that we found after we talked with Instacube. But it’s really interesting how they got their backers to mash up. So typically Kickstarter campaigns have backers where it’s really high at the beginning, it goes down and then it comes up at the end again. Well they’re like let’s try to mash those up so that someone else’ high point isn’t our low point and then they can help out like that.

So, yeah. It’s interesting. It has happened before I don’t know to what success. I think both of our projects got boosts from that. Bigger than the cross pollination of backers I think it’s the rejuvenation of the story in the media. So getting another other posts here or another write up over there that’s the keys to that. Media outlets are hungry for information. They want the story to write, but they don’t want to feel like they’re just being a mouthpiece. So if they have something interesting to talk about they will.

Clay: Yeah.That’s really interesting. So this is kind of like most — anything with a deadline like some sort of coupons deal is about to expire or a typical launch where maybe a discount is ending or carts closing. There’s usually like a U shaped kind of interest curve where it’s high at the beginning and then high at the end when the cart’s about to close. And so you’re saying that using this strategy you’re able to turn it more into just a horizontal line or maybe even a line that goes up over time. Have you found that?
Ben: Turning a U into a W.
Clay: Exactly turn the V in to a W. That’s really good. So has that effectively happened?
Ben: To some extent yes. I think that we still would like to have a bit more media during this middle time. I have no idea what to expect in the last couple of days. I have a hard time thinking that we’re going to have the same kind of uptake. I really feel like are people waiting for something? Maybe they are. Maybe they aren’t. Maybe they’re waiting to see if they have money or if our projects seems legit or what it is, but if we do have a big uptake that’s great. I just don’t know what to expect.

So I mean, the first week of this it was just like a rollercoaster. We didn’t know what was happening, I wasn’t sleeping barely at all. I think we’ve gotten a little bit more relaxed in the middle of this and maybe that’s apparently because the number of backers each day and questions each day has gone down. But yeah, it’s interesting.

Clay: Interesting. Yeah, I mean human psychology pisses me off so often but it’s really sad that if you force someone to make a decision even if the large majority of the people decide not to do it, you’re still going to get a much — if you take the entire Kickstarter universe, if you forced every single one of them to make a decision about your project even if the vast majority say no, a certain percentage are going to say yes. And because you forced them to make a decision by closing this, you’re going to see, yeah. In my prediction, I’m going to call my prediction on this. You’re going to see a huge spike at the end. In my opinion maybe I’ll be wrong. We’ll revisit that maybe in a later marketing show. Ok, cool. So you’ve got ten days left is that correct?
Ben: Yeah.
Clay: Ok. And you’ve got you’re saying one more big thing to unveil anymore?
Ben: I don’t even know that we have one big thing. We certainly have more updates coming. We’ve got one ready almost. We were going to do it this afternoon, but time got away from us, maybe tomorrow morning. Talking about specifically the hardware where we are at with that, showing off some of the new enclosure designs for the little things, which I think would be very cool. And then maybe get a little bit more into what is that stretch goal of a million look like? We do want to hit a million it would be great. We’d be the 2nd highest grossing technology projects on Kickstarter if we did that. So we definitely would love to do that [inaudible 0:36:24].
Clay: Ok, so you’re [Inaudible 0:36:17] I guess what I want to know now is what your original plan was for this Kickstarter campaign. Were you looking to use this to get some money, obviously money is a component here, but to get attention to leverage into some really significant venture capital or are you still hoping to completely and 100% boot strap this?
Ben: Well, first and foremost we’re interested in getting customer feedback and seeing how it was received. We thought everyone we talked to was excited about the idea but until we really put it out to more mass audience we weren’t sure. So we wanted to get that feedback. We wanted to get a hungry base of people. Regardless of what happened I think that would have been a great outcome. That being said I think a business like this needs capital and especially if we want to grow fast. Having a successful Kickstarter campaign hopefully allows us to bypass some of the early [inaudible 0:37:20] and get right into a better evaluation and a bigger round. So that is our plan to do that and hopefully some of those talks are already underway.
Clay: Cool. That’s awesome. And I think it’s absolutely appropriate that they would be. For everyone watching there’s a lot of boot strapped people. But basically the appearance that SmartThings has made on Kickstarter means that instead of maybe having some conversations with investors that are initially maybe about only 100,000 or 200,000 in exchange for a large percentage of equity in the company, because they’ve proven that this is a viable idea and because there’s been so much interest in route two million dollars on Kickstarter. now discussions can start being about a lot more money for less of the company because the idea has proven itself. So that’s what it is about.

Cool. So how has your role in Refractor affected all of this? Do you feel split much of the time? Is it frustrating when — and I realize this is sort of an odd position to put you in, but is it difficult to be like, “Ah, I got this client project and I have to close something that doesn’t seem anywhere near as huge and interesting is a platform that’s going to integrate the cloud in web apps with physical objects and everyday home that consumers are going to be able to access and could potentially disrupt a whole lot of different market places. Many of which you probably haven’t even thought of yet.” How do you do that? How do you balance that?

Ben: Well it is something that isn’t new to me. Like I mentioned earlier we have been sort of split attention for the last three or four years as we got sucked into the acquisition of that previous project called club profile. That was both a learning experience and kind of stressful. We had to grow Refractor in a way that allowed it to work ok without us being totally involved. We have a president. He’s in charge of business development and things like that. So that’s been very helpful. It helps that we have very self guided self motivating teams at Refractor. But it is hard to be a part of the team then not a part of the team sometimes. I don’t know how that’s going to change over time or what happens. I mean certainly there could be passed forward where that’s no longer the case am I’m not splitting my time which would definitely be a good change for me. I’d like to be able to have a single focus. Well, a single focus and then Mini-Star.
Clay: Totally, totally. So for everyone watching Refractor is Ben’s — he does development consulting work and so I guess people would call it a development shop, although I don’t know what I think of that term. Ben is also one of the co-founders and someone who runs Mini-Star which puts on Mini-Bar which is Minnesota’s bar camp and a bunch of other things. So he’s had his feet in the entrepreneurial — in the tech scene here locally for a long time.

Ben I just want to thank you so much for making the time to be here for the insights into Kickstarter campaign at this scale and really just for being so generous with the information and the transparency that you’ve shared. I know this is going to be a huge benefit to everyone who watches this and also the marketing show community. So thank you so much for being here and I wish you guys all the best. Everyone who’s watching this I am linked to this. But I highly encourage you to check out these products. To get on the ground floor of something that is incredibly disruptive in the kind of way that I haven’t seen for a long time and just to check out what they’re doing maybe sign up for their email lessons.

Last question, all right, last question.

Ben: You remembered it?
Clay: I did, I did. How have conversions been to your email list? Can you share how many email addresses you have and how that whole effort has been?
Ben: To my knowledge we have not used any email lists. I have reached out and contacted people who have interacted with me on email for the course of a decade. So it can be quite large. But we did [inaudible 0:42:14] it’s a list but it is really specialized. We tried to reach out to people in more individualized ways, group of people who are interested in entrepreneurial things, people who are interested in Minnesota Tech and things like that. And so yeah, I don’t have a lot of visibility into that because we didn’t use tools for that. I used my Gmail account. So I don’t know click through rates or open rates or anything like that. Which it would be nice to have that but then again I don’t know, it would feel different.
Clay: It would feel completely different. I love the way you’re doing it and I think it’s perfectly appropriate. We’re reworking a lot of the ways we do things around here too. I guess what I was asking about is like if you go to smartthings.com, I believe there’s an opting box there. I was wondering how have sign up’s been to that email list and how do you plan on using that?
Ben: I haven’t checked that in a while actually. In the first week or so we had about 500 or 400 and something email addresses, but to this date I don’t think we’ve used them at all to communicate. We’ll probably send out an email to them before the campaign ends to say hey this is your chance, but yeah, we haven’t used that yet. We’re hoping to use that after the campaign and let people know about what we’re doing after that.
Clay: Cool. All right, well we’ll properly close this out now. Ben, thank you so much for being here. Thank you for your insights. Thanks for all that you’ve done for the Minnesota Tech community as well. And again everyone go check SmartThings, them out on smartthings.com and also on Kickstarter consider donating. And thanks so much Ben, I really appreciate it.
Ben: Thank you Clay.
  • i just quick popped over to their video to learn what this company is about – WOW!!!!! This is genius!!!! and the founders seem so down to earth. can’t wait to hear this interview!

    • Jaxi, I’m glad that you liked this. I think it’s one of our best interviews in terms of quality of content.

  • Michael Arco

    I’d have to agree with you Clay; Fantastic info volunteered in this one. Thank you for doing such a great job explaining what exactly they’re doing. I was a bit lost at first, but you did an awesome job bring me back up to speed.

    • Glad you liked this, Michael! This might not be a mainstream interview, but this kind of content is difficult to find anywhere.

  • Piers | KickstartersHQ.com

    Great interview Clay. Interesting stuff.

    Worth noting is that since it looks like this interview was recorded, that Kickstarter has taken quite strong action to reinforce that Kickstarter is not a store. That was actually the name of their blog post where they added new rules where people need to talk about the risks and banning photorealistic renderings and mockups that make it look like the prototype is further along than it actually is.

  • Aarne

    would be awesome if used video player would have a volume control, don’t ya think

    • Folks are happy with the minimalism of the player and I tend to agree with them. If you’d like to increase the volume, please use the volume controls for your computer.

  • Ben Edwards

    Cool, another Ben Edwards! This project makes me think of Chris Anderson’s new book “Makers”. It’s amazing that technology makes product development/funding like this possible. Exciting times!

    • Exciting times indeed. The “Ben Edwards” of the world are collectively kicking arse.

  • FYI, I have finished 4 Kickstarter projects in the board game space, and the Kickstarter internal traffic because a higher portion (as a percentage) over time. Even in the game space.

    But, I don’t know how much of the Kickstarter Search based backers should be attributed to Kickstarter, as that is a brand result in my mind.