How One Start-up Prepared for Crowdfunding Success
In 2010, Ron Alvarado, Mike Williamson, and Matt McDonald—Santa Clara University seniors at the time—were having drinks when inspiration struck: What if they could create an all-natural cocktail mix that would taste great while also including needed nutrients such as vitamins and electrolytes? That simple premise was the genesis of their business, Ficks & Co. Alvarado says, “We wanted Ficks to be what sports drinks were to beverages a couple of decades ago—a category disruptor.”
Confident that they had identified a real need in the market but with no prior knowledge of the food and beverage world, the finance majors smartly approached experts to help them develop their product and build their brand. They started close to home by turning to SCU’s chemistry department for guidance on their product. Then, a cold call to Liquid Agency’s CEO and president, Scott Gardner, led to branding services in exchange for an ownership stake in Ficks.
Despite having the expertise of seasoned professionals on hand, the new college graduates had a long way to go. Alvarado recalls, “There was a huge learning curve for us in terms of sourcing raw materials, setting up a supply chain, and finding a co-packer to put it all together and manufacture the bottles.” As the pieces came together, the Ficks team turned to Indiegogo to launch a crowdfunding campaign, with a goal of raising $28,000.
A key to any successful Indiegogo campaign is offering the right price-point options—low enough to entice people to buy a new product but high enough to make a profit. To help determine the best price points, the Ficks crew partnered with UPS, as their prices would include domestic and international packaging plus shipping. “UPS got us set up through an online whiteboard session and via FaceTime,” Alvarado says. “They walked us through whichever stage of the business life cycle we were in, from fulfilling small domestic orders to big crate orders.”
The Indiegogo campaign launched with buy-ins ranging from single bottles of the lemon, lime, or ginger flavor to bigger perks like a weekend getaway in San Francisco. Media caught wind of Ficks during the Indiegogo run, and by the end of the 30-day campaign, the start-up had surpassed its goal, with $41,170 from supporters in 17 countries.
With the success of Ficks’ Indiegogo campaign came follow-up—700 orders that needed to be filled over the course of one weekend. The team of three described this time as being “dropped into the fire.” Parents, roommates, and friends convened in Williamson’s garage to help. “There were a lot of paper cuts,” Alvarado says, laughing.
Other challenges were encountered during shipping. UPS alerted Ficks that bottles were breaking on the line. This meant repackaging certain orders. “It’s tough for a new company to take losses like that,” Alvarado says. But UPS stepped in and helped Ficks refine its online order-fulfillment and packaging methods based on industry best practices. By March 2014, with its first shipment heading out the door, Ficks & Co. was ready for its formal debut.
Now, 18 months later, Ficks can be found at major retailers including Nordstrom, Urban Outfitters, and Harvey Nichols (in the U.K.). Its operations have expanded to include a manufacturing facility in Napa, the Venus labs in Santa Cruz, and Liquid Agency’s San Jose offices.
While most new entrepreneurs are quick to raise capital or sell as many products as possible, Alvarado, Williamson, and McDonald advise a more methodical approach that involves engaging the help of experts first—even if it means giving them equity in lieu of cash. “Get a support system in order for when you start,” Alvarado says. “Then, when you’re ready to go full bore, it’s more likely to work.”
Above all, Alvarado and Williamson both emphasize that no matter how crazy an idea, the only way to know if it will succeed is to give it a try.
This sponsored post is a collaboration between TakePart and UPS, who have teamed up to spotlight innovative entrepreneurs who are successfully adapting to the changing rules of a new economy. See more at TakePart Business.