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Crowdfunding Powers Up Production of Drone Device
October 18, 2016
Young Entrepreneurs: DroneRafts LLC is an enterprise involving alumni (from left) Adam Morrison, Marcie (Kam) Morrison, and David Moser. Missing from the photo is Zachariah Cole.
Light-bulb moments can happen just about anywhere. However, the real work comes from creating a successful business model, with the funding that’s so critical to turning that original concept into reality.
Thanks to social media and the Internet, inventors and entrepreneurs are finding the support they need through a concept known as crowdfunding—raising funds through special sites, such as Kickstarter, that leverage the extensive reach of the Internet and are set up to accept individual donations that add up to significant dollars.
Just ask four alumni who cofounded DroneRafts LLC, an Indianapolis-based entrepreneurial enterprise that’s bringing to market WaterStrider, a flotation device that enables a drone to take off and land on water. The product also helps drones achieve a smooth landing on dry but rough or uneven surfaces that could damage the drone or the camera that it often carries.
“It turns out that a lot of drone users operate in and around water, or areas where water is a good place to take off and land,” explains Morrison, a 2000 mechanical engineering graduate who serves as head of engineering and technology.
Working with him are his wife, Marcie (Kam) Morrison, a 1999 mechanical engineering alumna; David Moser, a 2002 mechanical engineering alum; and Zacheriah Cole, a 2000 mechanical engineering graduate. All four were friends as Rose-Hulman students.
The entrepreneurs launched a Kickstarter campaign during the spring of 2016, seeking to raise at least $24,000 to help bring their idea to market. “It was specifically for ramping up production,” Morrison says. “While we invested a significant amount of our own money, it’s that much more cash that we would have had to come up with.”
The Kickstarter model allows backers to contribute to a project at varying levels, in exchange for a potential reward. If the project has to do with creating a new product, the reward often is the product itself, at a discount price. Investors can be acquaintances of the project creators, interested observers, or potential customers. Like most investments, a Kickstarter contribution doesn’t come with an ironclad guaranteed return, so it’s up to the project principals to persuade potential investors that they’re competent, reputable, and capable of delivering.
Versatile Drone: A Kickstarter campaign provided funding for DroneRafts LLC to develop the WaterStrider, a floatation device that enables a drone to take off and land on water.
DroneRafts’ campaign offered everything from a T-shirt for a $25 contribution to a $239 WaterStrider product for a contribution of $139 to $179 (the earliest backers got the best deal). With support from 159 backers, the campaign surpassed its target (collecting $24,229), and by early August the company was preparing to ship the rewards to its backers.
Morrison offers the following tips if you have a great idea that you want to develop with the aid of crowdfunding:
Plan Carefully: “Be super careful about what crowdfunding means—it’s not like free money.” Plan how you’ll use your crowdfunding proceeds. “You have to deliver something, and that costs money.”
Dig into Details: “Don’t underestimate the challenges of preparation and execution.” Your campaign needs to be well thought out, with lots of details about your qualifications and product. “It’s a lot harder to have a successful campaign than you might think.”
Have a Clear Message:“A lot of people are skittish about supporting crowdfunding.” The more you can spell out a reasonable, doable timeline, the more comfortable people will be in accepting your idea. “We didn’t want to have people waiting forever.”
Think Long-Term: Initial funding is great, but you need to attract the customers needed to sustain the venture. “Our objective is not to have a successful crowdfunding campaign; it’s to have a business.”