Friday, February 3, 2017

Frontrunning Kickstarter For Fun and Profit

Well, profit anyway.

In August 2007 we posted "James Grant on the Fed's Sub-prime Solution-Socialism for the Rich" which managed to combine credit analysis, Chairman Mao, climate history and the 56th stanza* of Tennyson's "In Memoriam" in 260 words (must have been really strong coffee that morning). I'm reminded of the Tennyson when thinking of the dog-eat-dog nature of this story:

*Fifty-sixth stanza of Tennyson's "In Memoriam":
Man her last work, who seem'd so fair,
Such splendid purpose in his eyes,
Who roll'd the psalm to wintry skies,
Who built him fanes of fruitless prayer,

Who trusted God was love indeed
And love Creation's final law -
Tho' nature, red in tooth and claw
With ravine, shriek'd against his creed -
Here's a good idea, kinda brutal, red in tooth and claw but good.
From CNBC:

This 24-year-old made $345,000 in 2 months by beating Kickstarters to market
Less than a month after starting a business, a 24-year-old entrepreneur CNBC has agreed to call "Jack" wired $70,000 to a factory in Shenzhen, China, praying that the money wasn't going to disappear.

Weeks later, 15,000 plastic toy cubes with joysticks and clickers on their sides, designed to help people who fidgeted too often, arrived. A whole team exhaled, excited about the possibility of making $345,000 in just two months.

The Stress Cube staff knew they were taking risks as they tried to capitalize on the success of various products on crowdfunding sites. They also knew the rewards could be enormous.
For Jack, this all started with an inflatable chair.

After graduating from college in Canada, Jack found himself bored of working on behalf of yet another social app hoping to one day garner a billion-dollar valuation.

"I started realizing I wanted to run a company that actually sold something," he recalls.

Around the same time he noticed a start-up that appeared poised to do that faster than anyone. It was an Indiegogo campaign for KAISR, an inflatable lounge chair made of parachute material that had surpassed its goal by raising $18,500 in 12 hours last March (and eventually over $4 million).
As the Indiegogo gained in popularity, Jack's research led him to realize that the idea was far from unique. In fact, the Lamzac inflatable lounge chair had already gone viral, five years after the idea was presented by its Dutch inventor on Holland's TV show "Best Idea of Holland."

The only thing that was new about this chair was the buzz from the crowdfunding campaign.
Jack wondered if he might be able to produce his own successful knockoff. A cursory search on Alibaba revealed manufacturers based in China that were offering product samples, and after minor sampling fees and a little back and forth with the winning factory, Jack had his product: The Cozy Bag...MUCH MORE