In this episode of the podcast, Daplie’s Co-Founder and CEO, Bryson Hill, and Vice President Brian Bourgerie, spoke with Crack the Crowd’s Dan Baird about launching two crowdfunding campaigns—simultaneously; one rewards and the other equity. After this podcast was recorded, the Daplie team hit their raise targets for both campaigns, a crowdfunding first.
Here’s a sneak peak;
“I’d rather be doing this than trying to go talk to banks or a lot of the traditional ways of verging capital.” Brian Bourgerie, Daplie’s Chief Operations Officer
“We all start from the same garage.” Bryson Hill,Daplie’s Co-Founder and CEO
More on Bryson and Brian
Bryson Hill: Bryson is an experienced salesman, product and people manager, and developer. He has sold millions in product revenue door to door, by telephone, television, e-commerce, and at big box retail.
Brian Bourgerie: Brian brings over a decade of experience working with startups, technology companies, e-commerce and crowdfunding. Brian helps strategize and execute on key revenue and operational activities.
If you have any questions or feedback, email us at info at crackthecrowd dot com. If you’ve got suggestions on who Dan should interview next, please drop us a line in the comments.
See the Full Transcript Below
Dan Baird: All right. So sitting down here with good friends, Bryson and…Jesus. See? You know what happens as soon as I turn on the recording is that. I start stumbling over my own words. So, Bryson and Brian, both of which who I’ve worked with at other gigs and crowdfunding in the past like CrowdEngine. They’ve since moved into the Reg CF space and they’ve come up with a really cool product called Daplie. We’ll put the link to it in the show notes, which is essentially kind of a combination of a private server slash your own private cloud in your own home. You get to have the server, you get to control where those files are and lie, how they’re backed up. You get to control your data. Is that a fair enough summation, gentlemen?
Bryson Hill: Yeah. It’s pretty good.
Dan Baird: Nice. And you guys are currently in Portugal for, what’s the name of the summit or the conference?
Bryson Hill: Yeah, so Web Summit. It’s been a fantastic expo. It’s startups from all over the world are participating in three different stages. They have Beta, they have Start, which is the beginning, and then they have Grow. And we’re right in the middle where we are past the beginning, hey-this-is-a-good-idea stage and moving into the go-to-market strategy of the product and the company. And then the Grow and Scale stage, we are quite at that point but those are the three different startups that are showcased out here. It’s actually been…It’s honestly, my favorite expo I’ve ever been to.
Brian Bourgerie: Yeah, I mean, it’s unique in the sense of, well, one, there’s over 53,000 attendees, which is insane. So like there’s so much going on. Besides having three giant like field houses almost, our convention center is full of different stuff being presented and shown off each day. There’s tons of stages and even a major stage with talks and like forums and all of these things going on about everything you can think of in tech. So whatever you like whether it’s FinTech, IOT, wearables, health tracking, whatever it is, I mean, big data, there’s something here for everyone at every stage. And then there’s even like investor hangout areas, women in entrepreneurship, like all sorts of things. And then lots of food. There’s pub crawls, there’s meetups that we can host. We actually hosted one called, “Decentralizing All the Things.” So I mean, there’s so much going on. It blows your mind but it’s super, super fun. And you meet so many people from around.
Bryson Hill: Yeah. And from an investing standpoint, there’s over 1500 investors from all over the world. So just today, we met investors from Sony and from big media groups in Germany and Switzerland and France. It’s really quite an interesting mix of people from all over the world but especially in Europe. It is based in Lisbon, Portugal, Bom Dia, in Portugal. Yeah, we sound like we’re trying to sell you some tickets to Web Summit but anybody that’s listening can get into. There’s been plenty of, specifically, crowd funding even startups out here who are getting into the space.
Brian Bourgerie: For sure. Yeah, I mean, we can go on forever about it may be on another time, but overall, really cool. It’s been really good for us, helping us get more exposure, things like that. And the nice…Well, I guess, we’ll probably get into it later but I guess I’ll mention it now. One of the nice things is, because we also are doing rewards crowdfund simultaneously with the Reg CF which hasn’t ever been done before, at least with the Reg CF and rewards crowdfunding. Our Indiegogo campaign which is only six days old, I think yesterday, my days are mixed up after flying across the world, but we funded 100% of our Indiegogo campaign in six days. And right after we presented on stage just sort of pitch competition, orders just started flowing in. Now, that’s for multiple reasons, but this definitely helped gain a lot of exposure and a lot of product validation.
Dan Baird: Well done, gentlemen. Well done. So, I do wanna hear a little bit about this because you guys, I mean, most people that are listening will probably know who both of you are in some way shape or form, if not, they do now. But you guys know crowdfunding, right? We all worked at and on several crowdfunding platforms at CrowdEngine. And you guys know exactly how arduous these campaigns are, how much goes into planning, and you know exactly what a headache they can be if they go sideways, and we know that they all go sideways to some extent.
Bryson Hill: Yeah.
Dan Baird: You chose, knowing all that, to do multiple campaigns on multiple platforms at the same time. You’re crazy.
Brian Bourgerie: Yep, we are.
Dan Baird: Crazy, but potentially crazy like a fox. I think there’s a lot to be said there. What led to that decision?
Bryson Hill: So what led to the decision was that we recognized an opportunity to build the company and build the product at the same time. Now, I wouldn’t necessarily advise this for most companies. But Daplie in particular is a company that is genuinely for the people and meant to be by the people. And what we mean by that is that every single customer, every single, at this point, investor, every single just owner of the product can be part of the movement because it really needs to be a movement otherwise we’re gonna fail. I mean, one question we get asked from investors all the time is, “You got these Facebooks and Googles and everybody you’re targeting, how are you gonna go up against them and actually create a difference and actually survive? These are billion dollar companies with unlimited budgets.”
And the reality is that we have to be nimble and we have to create a movement that is self-sustaining. And so we realized that really early on and it caused us to ponder, how can we engage our community in such a way that allows them to participate in the process of seeing this become successful over time. And we identified that the only to do that was to crowdfund the all the things. And so, obviously, we started getting ready for the right scarf, I wanna say probably a year ago now, and it was hugely arduous process. The Indiegogo campaign has a lot more material and a lot more resources and I think it’s not super complicated compared to Reg CF. But in the end, it just actually happened to line up that they were gonna launch relatively at the same time.
Initially, we were gonna launch the Reg CF about three months or so before entire of that campaign before we launched the Indiegogo crowdfunding campaign for products. But it just so happened that with timing of a prior deal that it wasn’t as advantageous for us. It came and sell through. And then we hooked up with who we’re with now, with Wefunder, having pretty good success, just so happens that those tricked in being the same time period. So it looks like really great strategy, or maybe it doesn’t look like great strategy and we look like idiots, but the point is that we are seeing success across promotions between the two campaigns. We have investors who’ve preordered and we also have preorders who are also becoming investors. So it’s actually proving to be a very interesting model that there could be some study about later but we’re just living in it. We’re trying to do the best we can.
Brian Bourgerie: Yeah. If anything, it’s a really good example for the industry. I feel like we’re blazing a lot of good trails in that sense. It’s how things are working out. To give you a little background more specifically on the journey to our Reg CF and how we got to where we’re at right now, is we originally, yeah, we want to launch on the first day that Reg CF, our maintenance team, became legal and everything. And we’re set up originally to use SeedInvest. We had checked out StartEngine, SeedInvest, what’s around. They’re doing a couple of platforms proved with time. Start getting ready to go.
But what we found, especially being one of the first one, is no one had done it. SeedInvest hadn’t done it, no one. Whereas in areas where you wouldn’t have expected like how we want to structure our offerings whether it was gonna be just for stock or convertible note or whatever, the thing that we didn’t really think about, it became a big issue, became a much bigger issue than we expected. So we ended up just finding it better not to go with SeedInvest, not that they’re bad, but definitely didn’t work for what we thought was best for our company.
Bryson Hill: And our customers.
Brian Bourgerie: And our customers, for sure. So we decided to take a step back. At that point, we decided, “Okay, it’s not feasible or smart to launch on the 16th. It’s not worth it just to be one of the first, we need to do it right.” So we took our time, got things structured better. We were able to see what was happening with these first companies, where some were succeeding, where some weren’t. And we were also able to see what portals were doing better than others. And, yeah, we got in contact with Wefunder and we’ve been working real close with them and overall very happy. They’ve been very collaborative. They’ve also, I mean, I think they do what, like 80% of all the Reg CF offerings out there just on their platform alone.
So they’ve been really responsive and good in that regard and I know they’re pushing really hard to make Reg CF more accessible, because although it sounds great and wonderful, crowdfunding for everyone, there’s still some major flaws in the lawn and how it’s executed and things like that. Everyone new understands Reg CF or have followed it already know, not being able to indicate interest ahead of time, or even talk about things, restrictions on how you market…can say makes it a little difficult, especially when you have Reg A plus which, and a lot less restriction, but still open to non-accredited investors and makes you kind of scratch your head like what’s the deal.
However, we’re pushing through it. And overall, I’m still glad we’re doing this. I mean, like Bryson said, it fits what we believe in its company. But it’s also a valid way to raise capital for your business. I mean, I would still, going through all this crap, I’d still rather be doing this than trying to go talk to banks or a lot of the traditional ways of verging capital.
Dan Baird:One thing you’re clearly finding is that in this, even if they don’t necessarily buy in many ways, you still actually add people to…you bring people into the tent. They know who you are, like you’re still building relationships. And what I think a lot of people miss is that you are, even if you have failed the campaigns in crowdfunding, you still are building an audience and you’re still building marketing tools that you can use in a different context later. They don’t realize that literally even in the worst-case scenario, half of that effort is still usable and very useful for any kind of marketing that you do, right? You basically look at the population, the demographics, all that stuff is still usable. Where they come from, other affinities and stuff, you strip out the crowdfunding related crap and you still have, “Oh, here’s our target consumer.” It’s actually easier in a lot of ways.
Brian Bourgerie: Yeah, exactly. It’s never zero return. You’re getting some sort of return. Even if you fail, you at least got something out of it and you learned from it. As opposed to, “I fight for a limited bank, got denied. I still don’t know my customer any better.” So you’re definitely getting something from it no matter what.
Dan Baird: Good point. Very cool. Now, when you guys went through and you were talking to these platforms, some of the things that we’ve seen is I see a lot of platforms that are, obviously, they’re still kind of learning what to do and how to do it. As you guys found, oftentimes they’ll dictate your terms as you mentioned, Brian. What were some of the deal breakers that you had? You don’t need to say who it came from or whatever, because they may have already even changed that policy. We don’t know. The space moves out quickly. But what were they trying to force you to do that seemed just like a bad idea?
Bryson Hill: Yeah. Very early on, there was more of a sentiment that I noticed towards structuring the deal like a bee city with the idea that it would be on behalf of the better good of the community. But what we realized was that that deal structuring was not really cohesive for the crowd. And so the reason why we can say that with confidence is that, you look at, I’m just gonna put a plug for Wefunder because that’s who we’re using. But you look at Wefunder, you go to Wefunder and they say, “All right, how would you like to structure the deal? And okay, sounds good guys. Can you prove to us that your valuation is correct?” And so, how do you do that as startup? Well, you have to have raised money from an investor at that valuation. So if you’re trying to raise a million bucks and you have a $5 million valuation, well, have you sold any stock to an investor or a convertible note where the cap is similar returns?
And so having an investor lead the round exactly prior to or having committed funds going into it, was the model that Wefunder had, compared to some other models that we are introduced to where it’s they’re doing valuations and due diligence which is…I think the due diligence evaluations are fine but then getting to that point where, well, they’re starting to negotiate the terms and negotiate the deal and trying to get the valuations lower and just really weird stuff that doesn’t really help you as a startup and as a company to really facilitate a well-structured deal even for yourself.
Some specific example was a preferred deal. Some of the earliest session…preferred deal with drag-along rights and also a two to one conversion. So you’re looking at an everyday investor putting in $100 and getting the ability to participate in a drag-along right and then also converting two to one. So converting the preferred share and then also converting on the common share. And when you’re talking about a startup, you’re talking about friends and family who’d put money in. And so you’re going to that round with the Reg CF and you’ve got friends and family and then you’re bringing on these new crowd Reg CF investors who are getting preferred stock, over who? Your friends and family. That was a really awkward fit that really just didn’t make sense for us.
And I can’t speak for every startup but I don’t think it would make sense for any of these startups that my friends with or that I’ve seen trying to go to market. Because we all start from the same garage. And so I think that the industry is starting to change a little bit. I think people are waking up and recognizing that Wefunder has been doing some right things in the industry. They only purchase 3% cash fee where the other models that we’ve seen it’s like 5% cash and 5% stock. And so it’s like a 10% fee versus a 3% fee. And then part of that is because of the other model I’m talking about, 5% of it being equity, they’re negotiating the terms really hard when really on another platform, we have an investor that’s already committed at a certain rate. And so it’s like apples and oranges but like the apple’s bad, you don’t want it. So I don’t mean to be really harsh but that’s just kind of what we saw, and did a 180 from one to another. And have been finding really good success with where we are at.
Brian Bourgerie: And actually on that note, really quick, I think, and I could be wrong, I think something that somewhat falls into that is also if the portal has a broker-dealer relationship or not, and if they’re gonna try to get stock as well in the companies versus those who are more like your traditional marketing portal. Obviously they’ve gone through thinner and everything but they’re still just a portal providing that service in that place and not invested in the same regard because they’re not getting stock out of it or they’re not dealing with a broker-dealer on a different level. I think that comes into place somewhat as well, either setting terms and just your overall process of launching on a platform.
Dan Baird: Got it. When you were comparing these platforms, and they’re obviously trying to pitch you as well. They wanna see what they can negotiate and get and they’re obviously…there was a little bit of a storming, where we got storming and norming, where they try a bunch of stuff to figure out what works basically by watching others and just seeing how people respond. And we’ve had the same kind of battle because, and I’m sure you guys have seen too or you’ve heard about it multiple times, where the client will come to you and say, “Obviously if we’re in this fundraising space, we do have some cash. We’re not naïve but we’re fundraising. So, of course, we’re not overflowing with cash and we would like to do an equity raise or we would like to do some equity compensation.”
But it does kind of warn and creates that conversation where you’re going, “I do want to protect myself and simultaneously, I don’t wanna hurt the company’s valuation either.” That always becomes an issue. And that second piece is, “How do other investors see my equity? They could see in those documents and everything else.” You mentioned that you’ve had new investors come on. Since then, have you gotten any feedback from institutional players or other kind of larger investors as to how they saw, “All right, now we’ve got a Reg CF on the cap table.” Do they give you any thumbs up, thumbs down as to how they viewed that cap table as a result?
Bryson Hill: So, traditional investors do not like Ref CF.
Dan Baird: Yeah.
Bryson Hill: I mean, I don’t know if you want me to go into that really but it’s not…Reg CF is a strategy for the long haul. So companies that are…I’ll give you an example that’s anecdotal of this, of our competitor who’s an indirect competitor but in the same space kind of thing. They actually did a crowdfunding event in the country where they’re from. And they went to Y Combinator and Y Combinator ended up buying out all the crowd investors. So if a company is going down the road of doing crowd investing and learning to scale with the crowd and making that part of their core business model, you really got to be committed to it. Because an investor is gonna come along, and especially with Reg CF and not being able to have, I don’t remember what it’s called, but some type of umbrella of all the Reg CF guys in one…You can’t do that right.
Without that being a function of Reg CF, it makes it really difficult for a VC to come on and be like, “Wait, you have how many people in your cap table and they put in how much money each?” It just sounds stupid to them. So, again, if it’s something that you’re into and you’re really interested in, it’s a very interesting way to raise money and to build your customer base but you have to be committed to it for the long haul.
Brian Bourgerie: Yeah. You need to know what you’re getting into now. I mean, there’s some investors, definitely not a lot, but there are some that are starting to understand that and taking it in strides. But if you’re gonna get into doing Reg CF, especially if this is your first major beyond maybe friends and family a round of funding, maybe a C or an A round, couple of things you should keep in mind. Either one, have a strategy to do crowdfunding the entire way if it makes sense, whether it’s a Reg CF, follow it up by a Reg A plus when you’re big enough and can do that, or maybe a regulation deed offering. Or, know, if you are gonna wanna go for more institutional investors or something later on who might have an issue with the cap table, if that PB issue isn’t fixed with Reg CF, then that’s one thing.
But, maybe when you’re writing up your terms, and be very upfront when someone is investing that there’s a buyout clause at a certain point if a bigger investor that’s better for the company comes in, you got to be super transparent, I’m sure. I’m not a lawyer, so maybe you can’t do that, but I’m pretty sure you can. Have that in mind as well ahead of time. Don’t go running in. You did your Reg CF, you’re super happy, and then all of a sudden you hit a wall with future investors who may not like that cap table structure.
Dan Baird: Got it. Cool. Let’s see. So let’s move on to basically what next then. If you knew you were gonna launch, we’ve got platforms. What was the content, the creative kind of process like, when you guys basically had to do the rubber heads, the road? I mean, I’ve seen drawing from this thing and from and how long. This is almost…yeah, right. I remember seeing the 3D mockups. What was it? A year ago? So once we’ve start to pulling the trigger and had the basic design of the unit built, we knew that the campaigns had to some extent been set on stone. How did you guys go around pulling off all of the content? Because, I mean, Brian, you’ve been stuffing your squarely little chicks as far as building email list for quite some time on this thing. Tell me a little bit about that preparation process and actually getting some of the content created, for example, the videos, campaign pitch, etc.
Brian Bourgerie: Yeah. So I could speak to some of that. It really came in a process. I mean, same with anything in business or life, you have your plan and then you do something totally different. So, I mean, we had a lot of plans. Like, this is what we’re gonna have by this time, and it’s this content, and it’s gonna be perfect. And then it just changes, or time changes, or the industry changes, everything changes. So I mean, but there’s gonna be some concept. I mean, building a big email list, a good email list more than a big email list, is important. Having a social based, having a social footprint, not 30 followers on your Facebook and 1 Twitter follower, something like that. I mean, having as much as you can, all those little things help speed along the process.
But then when it comes to content, you need to…this is where I think a lot of people fall short and we learn through it as well, making sure you have your messaging honed in. And many times, at this point, if it’s a startup, you might not know your customer intimately like who exactly and how they interact and it depends on your product and everything as well. But, you need to plan for different iterations in that. And you also to plan to be able to target a broader audience. So although you can do marketing and targeted marketing online, whether it’s Google Adwords or Facebook, you’re still gonna have a lot of people coming to your offerings that aren’t all the same. They’re not cookie-cutter people. They’re coming from everywhere on the internet. So you need to have something that makes sense with your content. So you need to be very specific with the content that you create and have it very engaging. I mean, a lot of this stuff is pretty standard when it comes to marketing content and advertising.
Bryson Hill: Yeah, just be quick to iterate. Be quick to iterate because as much as you want to think you know who your customer is, you have no idea. Your customer is until they put their credit card in the input box and consent. So when it comes right down to it, we’ve had 50 different customer profiles over the past year, and we prepared marketing for 20 of those customers. And what we found is that we’re seeing probably four or five of those profiles match up pretty identically as far as like who the early adopters of the product are. But even with that being said, figuring out the customer acquisition cost, you really have to figure that out at a certain scale. And the scale depends on what your product is. But for us, we’re still figuring that out. And it’s gonna take us probably until the end of these both campaigns to really understand exactly who our early adopters and our customer is.
Brian Bourgerie: Yeah, so on that note as well, because…and it just depends on if you’ve done any crowdfunding before or not. Because it’s equity, it’s for an investment. It’s also different than just a preorder for your product. I mean, we’re looking at both at the same time. Yes, we were able to use a lot of the same content for both campaigns. But, one is targeting investors. They’re investing in a company and some are putting a lot more than products [inaudible 00:27:04] and others are just buying the products, I [inaudible 00:27:08] rewards campaign. So you need to take that into account. And it’s really hard to judge because this is still new.
We don’t have a plethora of data of crowdfunding investors let alone non-accredited crowdfunding investors. So you have to find a mix between what would an investor want and what would a consumer buying a product want, and find something in the middle. Because they’re not like your sophisticated accredited investor who might just be looking for numbers or turns, whatever. Although they’re investing, they’re investing more of motion or because they believe in what you’re doing and they like the product. So you really have to know and play on that and that’s where knowing your customer is really important, and in this case knowing your investor, because a lot of the times, they’re the same person. They might put a little bit in or the minimum to invest just because they want to support you and they’ll buy your product. So it’s a hybrid of how you target people.
And that’s the other thing as well, when Bryson said iterate quickly. Yeah, don’t think you have it down. Don’t go making a video that you think is the end-all video right away until you’re really pretty sure on what you need because you might find something out and realize, “Okay, this video actually only targets one out of the five types of investors we’re gonna have.” And then you’re stuck and you have to do more editing or spend more money. So be very cautious on that part because you can’t just delete and rewrite if it’s a video. So I’d be very cautious and strategic with your video because that’s more of a one-shot thing, unless you have a lot of money or shooting yourself, whatever, but, yeah.
Dan Baird: Cool. Now, if we were to run through and talk about like each of those different channels that you’ve mentioned, I don’t wanna spend too much time, but just out of curiosity, because like any other startup, you’re a startup. Again, you guys have really smart guys on your team. But I’m guessing here, like pretty much every other Reg CF out there, oftentimes they’re leaning on product reviews, influencer outreach, social, existing email list, and they’re minimizing the PPC budget just because it requires more budget. We have more human resources than we do dollars for just paid outreach. So you pay for it one way or the other. But we have human capital. So let’s utilize that.
Brian, you and I have talked a little bit. I’ve seen, you did a lot of homework on product reviews and influencers bloggers. You did a lot of research on the platforms and basically what kind of marketing tools they had, social, email. Of those, what tended to work for you? Where did you put your eggs and which one seemed to have hatched efficiently?
Brian Bourgerie: Yeah, so there’s multiple points on that. One thing that I like to do is once you actually have your platform and everything, I like to be in open communication with the platform to know what they’re doing and when was their promotion. So even if they’re not…I mean, they’re not gonna just promote you or do any special favor, because they can’t, but knowing what they’re gonna promote and when and maybe work that into your strategy as well, whether it’s an outreach or something like that, or coordinating your own email, email list they’re pushing out.
I have been happy actually when…I mean, we’ve seen an uptake every time we’ve been in the newsletter from Wefunder, whether it’s announcing us as new or something like that, never singled out or anything but even when we’re in a newsletter, there’s always an uptake in investment and in questions that are asked which are good. I can so much get those answered and bring on more investors. So coordination is key.
Like I said, email is always important. So it’s not just give big list and blast it out because our list, our personal list, is like opted in from our site wasn’t skewed just from that. But they were opted in and they’re interested. However, people don’t always check their emails. It goes into the promotions tab, if you’re sending it from MailChimp or something has to turn it. So you have to keep track and know that you’ll have to segment those emails, because there’s going to be people who don’t even open the first three. Maybe they don’t even know they ever got them. So you can’t assume that everyone is gonna see that stuff. So you have to have a long term play with multiple emails and that strategy in doing that.
Making your calls to action are also very important. Again, a lot of this is standard stuff. But it’s important having clear calls to action. Don’t tell them too much. That’s something that I struggled with is we have so much going on, multiple campaigns going to Portugal, being on product trying like all sorts of stuff that you wanna tell them. But you don’t want it to loot but you want them to do what, to invest in your company. So I’d be strategic with that.
And then once you get them on board, what I found that helps as well is make sure to reach out and develop that connection in relationship with those early investors, because a lot of them are willing to help. I was actually really surprised that a lot of our investors, they’ll send in a message with their investment saying, “Hey, I am a developer. I could help with this or give feedback, blah, blah, blah. Or hey, I’m retired but I can sell snow to a polar bear.” Someone actually said that. Like, “Let me know if you need me,” thing. So that’s actually been really full.
So don’t be afraid to try to leverage that and develop that relationship. And whether that’s doing a personal email to them like I did or making sure you’re doing updates through the platform and keeping people up to date. Something that I’m just gonna try and track. So maybe if we talk again, I can tell you how it works. You can do public updates. At least on Wefunder, you can. You knew a public update where it was posted like on their message word blog page or whatever that anyone can see versus just investor only updates. So taking advantage of things like that, because you can post that update, invite your investors to share and promote things, and really be more boots on the ground for you so you’re not doing it all by yourself, I mean, in the end, that’s one of the things that you wanna gain from crowdfunding that you couldn’t do before. And then, I don’t know. I just rambled through a lot. But what else do you wanna hear about?
Dan Baird: No worries. I think that largely covered it. I mean, right now you guys are midway into both campaigns. I know you…let’s see. Your Indiegogo, you’re actually 125% of goal as of right now, gentlemen. Congratulations.
Brian Bourgerie: Yep. Thank you.
Dan Baird: And the Wefunder, what are you guys up to at the moment. Let’s see. Tell me one other thing. This is actually quite clever, I think, for any of the listeners out there that realize, or have seen the rules on Reg CF, there’s a very stupid non-test that waters clause in there that is incredibly damaging to people that are trying to do crowdfunding. I mean, one of the best…We have our three-legged stool of good, fast, cheap. You get two. You don’t get all three. And pick your two. And with Reg CF, they put in their regulation that you actually can’t speak about your campaign publicly and you can lose the exemption if you do speak about it publicly which is very, very difficult. What did you guys do to battle that?
Bryson Hill: Yeah, you’re talking about before you launch?
Dan Baird: Yeah.
Bryson Hill: Okay, yeah.
Dan Baird: What did you guys do? This was. I mean obviously to some extent, you have to…you can get feedback but it has to be very…it’s a close group. It’s gotta be in the right context. We got our little list of things you can and cannot say. And there’s a big list of stuff you cannot say and when you can say it. But how did you…you guys had a cool little clever kind of launch strategy on Wefunder. Tell us about it.
Bryson Hill: So, as a preamble of that, going into it, this is how I had to introduce every single person that I talk to about it. “Now, I can’t tell you for sure but we’re considering doing a Reg CF deal.”
Brian Bourgerie: Or even more wire down, we’re considering raising money for crowdfunding. [Crosstalk]
Bryson Hill: Maybe, I’m not sure yet but we might be. By the way, we need your help to do this service to get ready for it. Okay, I didn’t just say that. Like that type of stuff, I mean, in like five years, I’m sure that the regulators are gonna look back and be like, “That was so stupid.” I mean, that’s maybe boardroom talk. But I just feel like there’s a lot of that stuff that’s gonna go by the wayside. But in regards to Wefunder, like, is your question specifically about what went into it, leading up to it, or…?
Dan Baird: Just basically, how did you manage the process? I think Brian knows exactly what I mean because I’ve patted him on the back several times.
Brian Bourgerie: Yeah, I mean, like we said, we had a moving target like everyone does. Things changed. So we decided at one point that we had people who had been telling us, “We wanna invest,” not necessarily through crowdfunding, but just that they wanna put money in. And I had to keep giving like these answers like, “Oh, you’ll be able to soon,” but not tell them why they can’t invest right now or anything as we try to get everything ready. So we decided the problem be advantageous if we file all of our forms, get them listed, and essentially, open our offering, but just don’t put it so it’s searchable on Google. Don’t have it on the homepage of Wefunder and have it, not private, just not out there for the public because you can’t keep it from private. So we launched. And we didn’t do this as long as we mentioned, but yeah, we opened it up for a super short period where…and it wasn’t like on the main page or anything like that.
Bryson Hill: Yeah. And that quickly changed when Wefunder…We were actually surprised by this. They included us in the newsletter that went out and the campaign just completely blew up. So we hadn’t even planned to be on that newsletter. I mean, I think, Brian probably had been talking with them. Maybe to me it was more of a surprised. But Brian just does great job. But anyways, we got in that newsletter and then by the next morning we had already had 25 investors in to the campaign.
So one of the things that I took away from that, and this is also true Indiegogo as well is that the asset because the platform already has like the email list that they sent out, those are hugely, hugely beneficial to your campaign. So at least it was for us. It showed a lot of interest. And those were people that we didn’t know them. We didn’t know they’d be our customer, we didn’t know they’d be an investor in our company, but they ended up being part of that initial juice to get all of the other people who we’d already been talking to really excited like, “Wow, there’s really an opportunity that we’re seeing here but let’s jump on board.”
Brian Bourgerie: Yeah. So that turned out to be very fortunate for us. I don’t think it will work out for that 99.99% of the people. But if you do have people who are itching to invest and get money in and maybe you’re not ready on the marketing side, you just blast it out or you don’t have the budget together, whatever it is, you could technically open your offering. Just don’t be publicizing it. Don’t have it into newsletters although ours happened to be in the newsletter really early which turned out good for us. But you could technically have it live and just not promote it. And then on board those people who maybe small families and friends who will put that money in so when you do advertise, put it public, you already have had initial interest.
Bryson Hill: And just to be uber clear on the way that that’s phrased, it’s not that it’s private, it’s just not advertised. So having the listing available, anybody can find it, anybody can go to it, they can type in Daplie on the search for Wefunder. But we’re just talking about not including advertising dollars into the campaign to push it. It’s still public. It’s still there. We’re just not actively pushing it. That’s what we’re talking about.
Dan Baird: You’re deliberately doing what everyone else does by mistake, with a plan. Everyone else just forgets to promote it and thinks build it and they will come. Smart move, very smart move. What have you guys learned so far, overall? I mean, we’ve already learned a ton from what you’ve gotten so far but you’re happy with this route?
Bryson Hill: Yeah, I would say overall, it’s been a very good opportunity for us to learn. I would say the one thing that we would say, have more of, is you’re here trying to raise money for growing your company but the mistake that you’re gonna make if you think that way is that you’re gonna realize you wish you had more money to advertise. And so, make sure that you figure out on some level, talk to some expert, do some ad testing, figure out what the acquisition cost might be, and figure out where your goal is, and then figure out the metrics by which you need to hit that goal.
So if you wanna get 100 investors, how much is 100 investors gonna cost you to raise that amount of money. If it’s $20 an investor, you’re gonna need two grand. And if you don’t have that two grand and you think you’re gonna go raise all this money and create a great campaign and have great success, well, I’m here to tell you, you’re gonna fall right on your face. And that’s what we had to learn really early on. It’s like, “Hey, we have this campaign. We have all these things that we’re excited about,” but if you don’t have the advertising budget to go and kill it, well, you’re not gonna kill it.
And so, we are excited now because we’re starting some of the PR and some of the work and some of the really tough labor of love that we’re putting into the outreach and like the really manual labor stuff. And we’re starting to do a little bit during [inaudible 00:42:35] advertising, remarketing and all that, that’s now becoming more effective. But if you’re gonna do it right, it’s really counterintuitive you think, “Well, I’m just gonna go raise a bunch of money.” If you don’t do the math before you do that, you’re gonna be pretty bumped. So, make sure you do the math of how much money you need, going through with a clear goal, and then just plough the money into the advertising. Get somebody who knows what they’re doing if you don’t know what you’re doing.
Brian Bourgerie: Yeah, maybe Dan is the man for that.
Bryson Hill: Dan, man.
Dan Baird: That’s what we do.
Brian Bourgerie: Exactly. So, there’s something else as well with the nuance of Reg CF, particularly, because you can’t advertise beforehand what you’re doing, which honestly, I still don’t get because that’s just preps the potential investor who’s probably unaccredited or unsophisticated to plan, to maybe make an investment which I think would be better for everyone. But find a way to generate buzz with your base, your current customers, your current supporters, not around offering because they can’t know about it yet, but with something in your business, or something you’re doing, whatever it is, I don’t think it necessarily matters. But having them actively engaged very close leading up to when you launch, so they’re already used to or looking forward to hearing from you or something and not just they’ve been on your list for a year and a half and you hope they remember who you are or something like that.
I mean, you’re early on in your company, so you might not have a lot of contact points. But find a way to get them engaged and things to be active on your social and things like that beforehand even if it has nothing to do with raising money, maybe you just start putting out a lot of funding content and they just like looking at your page or engaging with you, whatever it is, have that going. Then when you do launch, you’re already top of mind. And my prediction is that would actually help a lot in the early couple of days or weeks of your round.
Dan Baird: Got it. Very cool. Very smart gentlemen. And I appreciate the time. And I just wanna let you know, the challenge is I’m always amazed at how much easier it is to invest in a Reg CF campaign versus a Reg D, because I just invested in Daplie. That’s no endorsement. I don’t like you guys even but…
Brian Bourgerie: Yeah, I know. I could show you how much Jim just invested backflip on my phone.
Dan Baird: But well done gentlemen. Good luck in Portugal. We hugely appreciate the time, love chatting, and great work guys, really, great work.
Brian Bourgerie: Yeah, thanks. We’ll let you know or you’ll probably find out if we crush or burn or if we take after the moon. But we’ll let you know if there’s anything else beneficial for others.
Dan Baird: Well done.
Bryson Hill: Yeah. And if there’s anybody else that’s interested in investing in the campaign, they can go to Daplie.com/invest. It’s D-A-P-L-I-E, I’m sure Dan will put them in the notes. Our preorder of the product, daplie.com/preorder. Thank you so much guys. I appreciate it.
Dan Baird: Yeah, thank you gentlemen. And for everyone else listening, show notes too, I’ll show you where you can find these guys on Twitter and everything else. So thanks again guys.