By Shannon Furniss for the Montana High Tech Business Alliance
“I remember watching day one and day two and just seeing this hockey stick shoot up. They hit their goal, and then the social media just blew up. … Before you knew it they were sold out, which is a dream come true.”
-Les Craig, Program Director, Blackstone LaunchPad, Montana State University
Five months ago, a Bozeman-based couple launched what is probably the most successful Kickstarter campaign in Montana history. Their goal was to raise $70,000 to take their desktop computer-driven mill into production. In the first hour they surpassed that goal. Within a week, Michelle and Matt Hertel had 250-plus backers pledging more than $355,000 in support of their project and had sold out of the 100 machines they were offering for pre-orders.
Michelle, a mechanical engineer, and Matt, a machinist, spent four years developing the machine and are cofounders of their company, Pocket NC.
Kickstarter is a funding platform that is a “brilliant service” for entrepreneurs, allowing them to raise startup funds through an online crowd-sourced campaign, according to Les Craig, program director of the Blackstone LaunchPad at Montana State University. Backers can make pledges to support a project and they can pre-order products.
With a global community built around creative projects, Kickstarter is an important vehicle for entrepreneurs to test the market at a low cost with reduced risk to see if people are interested in their product, Craig said. Manufacturing a high-tech product can be prohibitively expensive, and Kickstarter helps entrepreneurs assess whether they should invest their time and money into production.
The Bozeman LaunchPad helped the Hertels with their startup and provided valuable advice on the Kickstarter campaign, according to Michelle.
The fact that the Hertels set their fundraising goal at $70,000 – a little bit lower than they might have – was an excellent strategy, according to Craig.
“The idea of a surge goal gets people excited,” he said. “It creates scarcity and pushes these campaigns over the edge, and that’s exactly what happened. I remember watching day one and day two and just seeing this hockey stick shoot up. They hit their goal, and then the social media just blew up. People were so intrigued by this, and before you knew it they were sold out, which is a dream come true.”
Just last week, in time for Christmas, Pocket NC shipped out 19 of their desktop, five-axis movement computer numerically controlled (CNC) milling machines, which are capable of fabricating small items from organic materials like wood and alloys like aluminum and are in great demand by artists, inventors, innovators, and hobbyists. The rest of the machines that were pre-ordered during the Kickstarter campaign are being manufactured and will go out in the next several months, according to Michelle.
A large do-it-yourself community has emerged and given a new market to CNC milling machines for personal use rather than solely industrial use, Hertel said. Pocket NC’s machine is the first five-axis machine that is desktop-sized and is priced in a range that is affordable for individuals.
Returning Home to Launch Business Fueled by Maker Movement
The idea for Pocket NC came about when the Hertels were living in Seattle. After Michelle graduated from Montana State University in 2010, they moved to Seattle, where she took a job as an engineer at Boeing. Matt, who graduated from Helena College, began working as a machinist in the aerospace industry.
They were both intrigued by the “Maker Movement” where people across the nation are creating products ranging from robotics, electronic devices, and 3D printers from their garages and workshops. The couple quickly realized that there was not a lot of machinery available in the hobby market, and they started spending a lot of time “tinkering after their day jobs,” trying to develop a product that would fill the need, Michelle said.
The next four years were spent building five or six different prototypes for the machine. Once they had a working prototype – three years into the project – they headed to the World Maker Faire in New York to showcase their machine to around 100,000 people who attended the annual gathering.
The feedback from the New York event was amazing, Michelle said, and they began collecting emails and contact information from all the people who expressed interest. At that point, they knew they would be able to take their business to the next level. They quit their jobs, sold their house, and moved back to Bozeman – into Matt’s parents’ basement – to launch their business.
The Ingredients for a Successful Kickstarter Campaign
While the Kickstarter campaign was extremely successful for Pocket NC, it’s not necessarily an effective fundraising tool for all businesses, according to Craig of the Bozeman LaunchPad.
First, the product has to be of interest to a wide customer audience, Craig said. For example, an idea to start a Kickstarter campaign for something like an “innovative new bear trap” may not work out so well because bear traps are not widely applicable products, he said.
“The only people that are going to be using bear traps are people who are going to be hunting bears or people who work in the Forest Service,” Craig said. “For narrow segments, Kickstarters are a real challenge.”
The Hertels had all the right ingredients for a successful campaign, he said, including an innovative, high-quality product; perfect timing with the Maker Movement picking up momentum; and, tremendous interest on their social media channels.
“Social media is one of the most important variables of a Kickstarter campaign,” Craig said.
When Pocket NC launched their Kickstarter campaign, they had collected around 700 emails of people who were interested in their machine and had more than 2,000 Facebook followers, Michelle said.
Creating an effective video is also important in captivating a Kickstarter audience, Craig said, adding that audiences should be “wowed and engaged in the first 15 seconds.” View Pocket NC’s Kickstarter video below.
Ramping up Production and Hiring Employees
Last month, Michelle and Matt Hertel moved their operation out of their garage and into a commercial warehouse so they could ramp up production of their desktop computer-driven mill and start delivering the product to their customers.
The move has given the Hertels a lot more space to manufacture Pocket NC’s very popular machines. In addition to producing the machines pre-ordered through the Kickstarter, they announced late last week that they are taking pre-orders for an additional 140 machines. Since the announcement, 33 machines have already sold, Michelle said.
The couple just hired their first part-time employee, a Montana State University student who will transition to full time after graduation. The couple hopes to hire more employees in the near future so they can focus on the next steps – building an industrial version of their current machine and working on an international certification that will allow them to sell overseas.
A lot has happened since closing out the Kickstarter campaign. Michelle and Matt now have a three-month old baby, Ruby Louise, and have moved out of Matt’s parents’ basement into their own house.
According to Michelle: “Sometimes Matt and I just look at each other and say: ‘Is this really happening?’”
Since Kickstarter’s launch in 2009, 10 million people have backed a project, $2.1 billion has been pledged, and 97,875 projects have been successfully funded.
5 Tips for a Successful Kickstarter Campaign
from Les Craig, Blackstone LaunchPad, Montana State University
- Avoid narrow segments
- Tap current trends
- Create an innovative, high-quality product
- Leverage social media
- Shoot a captivating video
Top photo caption: Michelle and Matt Hertel, founders of Pocket NC, pictured with their desktop-sized, five-axis CNC milling machine. The couple spent four years developing the machine that is the first of its kind and is very popular with the do-it-yourself community. They left their jobs in Seattle, sold their house, and moved home to Montana to live in Matt’s parents’ basement so that they could launch their business. With advice from the Blackstone LaunchPad at Montana State University, the Hertels launched an incredibly successful Kickstarter campaign, surpassing their fundraising goal by $285,000 and selling out of the 100 machines offered for pre-orders. The Hertels shipped out their first 19 machines last week and are busy manufacturing the rest. Photo by Kelly Gorham.
About the Author: Shannon Furniss is a Missoula-area journalist and the managing director of Market Interactives. She writes articles on business trends and issues for the Montana High Tech Business Alliance, the Montana Business Quarterly, the Montanan, and other publications. She holds a degree in journalism from the University of Montana.
About the Publisher: The Montana High Tech Business Alliance is a statewide membership organization made up of more than 250 high tech and manufacturing firms and affiliates. More information on the Alliance can be found at: www.MTHighTech.org.