I Gave Myself 15 Minutes to Be Upset

When I received the notification from Kickstarter that my crowd funding project didn’t meet their guidelines, I put my head down and cried.

Yes, I admit it. I very unprofessionally cried. For 15 solid minutes.

I need funding for my new project, the Stikitty Base. It’s a product that completes my Stikitty System and it’s something that I know millions of cat owners around the world need and will love. After being rejected by the banks, the angels, and now Kickstarter, though, I thought I was out of options.

Every successful mompreneur I’ve ever met is tenacious. She has to be. I had to be, too.

Every successful mompreneur I've ever met is tenacious. She has to be.

Every successful mompreneur I’ve ever met is tenacious. She has to be.

After wallowing for as long as I would let myself, I wiped away my tears and started to get mad. I couldn’t be the only project to be rejected and they didn’t give me an explanation. Maybe they just don’t like pet products, I thought. So I Googled, “why did Kickstarter reject my project.” I found a really cool biomedical company that was creating a product that could help millions of patients. Their project was rejected by Kickstarter and then ended raising over $50,000 on Indiegogo.  The more I looked, the more “rejected” projects I found. There didn’t seem to be any rhyme or reason–all of what looked like really innovative projects and companies were from different industries, had different funding needs, and were from different parts of the country.

Feeling much better about my new pet product, I did much more research on crowdfunding platforms this time. I realized there were many more options than I thought. I chose Indiegogo because the platform gave me a lot more flexibility in terms of how and whether I would receive funding.

I have been live for four days now! http://igg.me/at/stikitty

It’s been fun and hard and exhausting. I’m getting hundreds of referrals and even more site visits so I know people are interested and following the campaign. We’ll see if that translates into funding! Wish me luck…

The Path that Led Me to Crowdfunding

I have this idea for a base for my award-winning product, the Stikitty.

The Stikitty is a cat litter mat fashioned after a cleanroom tacky mat. These mats sit outside cleanrooms and workers step on them to ensure all of the dirt and gunk from their shoes are removed before they enter the sanitary environment. Not long ago I accidentally spilled kitty litter on one and realized it gripped cat litter like nothing I’d ever seen.

A product idea was born! Knowing how much cat litter mess bothered me, I researched to determine if there would be a market for my sticky cat litter mat. As it turns out, the majority of cat owners report that cat litter tracking is the number one headache of owning a cat. Further research showed that many cat owners were not happy with the current cat litter mat options.

Cookie with the Stikitty

Cookie with the Stikitty

Encouraged, I had the Stikitty manufactured and packaged and it is now selling via retail pet shops, online merchandisers like SkyMall and Amazon.com, and my own Web site. My customers and potential customers tell me they like the way my product works, they’re just not thrilled with the way it looks.

So I went back to the drawing board and designed a base into which the Stikitty could slide. This base would be made of a waterproof material that is safe for cats and appealing to their humans. I’m choosing animal prints as those are very hot in the pet industry today!

Stikitty System: One of the World's Most Innovative Cat Litter Mat Systems

Stikitty System: One of the World’s Most Innovative Cat Litter Mat Systems

With the Base and the Stikitty (now acting as a Refill for the Base), I’m creating one of the world’s most innovative cat litter mat systems.

But to do so, I need funding. Having been rejected for more traditional funding–multiple times–I decided to check out crowd funding. This is where everyday individuals donate small amounts of money to help entrepreneurs launch their initiatives.

I had heard of Kickstarter before so I went to them first. I filed my patent application, filled out the online forms, and hit submit to have my project approved.

It was rejected.

“How much rejection can a person take,” I wondered.

(Sneak preview of my campaign as described in the next post:http://igg.me/at/stikitty/x/3229527)

Funding: Plan B

I allowed myself some time to be dejected after being rejected for a bank loan.

High Risk, Small Business--Yep That's Me!

High Risk, Small Business–Yep That’s Me!

My dream of creating a stylish base to extend the performance and looks of my popular product, the Stikitty, wouldn’t die though. I had heard of crowd funding at that time, but my eyes were set on angel financing.According to many experts, angel financing is perfect for high risk, small business entities that need funding but are too small for the venture capitalists and too risky for the banks. Yep, that sounded like me!

So what are angel investors? Think Shark Tank, but for the real world. These are typically wealthy individuals who like to invest in small companies, but are first and foremost business people. They’ll take a chance on you but want a return for their money–typically in the form of a percentage ownership, and they often want a return of 5-10 times their investment within 5 to 7 years.

In Austin, TX, where my company is headquartered we have several networks of angel investors. The advantage of a network is that entrepreneurs can pitch to several investors at one time.Before approaching any of the networks, I did my homework–literally. I took Kim Lavine’s Academy Course on “How to Raise Angel Financing.” I dusted off and refreshed my business plan, perfected my pitch sheet, and prepared my pitch presentation. Then I practiced, practiced, practiced.

The network I chose to pitch to had several phases of the funding process. I made it past the video pitch. Then the screening pitch and even the general pitch. My cat litter mat, the Stikitty, and I even made it to the final pitch phase with three other hopeful entrepreneurs.

I admit I felt a little ridiculous. Don’t get me wrong; I had a great story. The Stikitty was doing well with online sales and had been picked up by three of the top 6 US pet distributors and was in retail stores throughout the US. I had generated just over $50,000 in retail sales for 2012. And, I had a new idea that could be patent-protected.

However, I was up against three technology entrepreneurs; two had already raised hundreds of thousands of dollars in earlier rounds of funding and were asking for millions of dollars to continue their businesses. In a tech town like Austin, it’s hard to find an investor that gets excited about a cat litter mat over the latest tech gizmo or mobile app.

In the end, the angel network chose two of the tech entrepreneurs. They invited me to come back, though, when I generated more than $100,000 in sales and needed “real money.”

Did I have it in me for a Plan C?

Where Does a Mompreneur Go When She Needs Funding?

What's a Mompreneur to Do When She Has a Great Idea and No Way to Fund It?

What’s a Mompreneur to Do When She Has a Great Idea and No Way to Fund It?

What’s a mompreneur to do when she has a great idea and no way to fund it?

If you’re like me, I started at the bank and asked for a SBA loan. I had just come off a good run in SkyMall where my Stikitty sold over 700 units. I made enough money to buy more inventory, but didn’t have enough to do any additional advertising.

And, I had a great idea for a new product. Something that would extend the performance and the appeal of the Stikitty. Better yet, it was something I could patent.

But I needed money.

I had tapped out my own funds, and those of my friends and family, with the launch of the Stikitty.

So I went to my business bank and applied for a small business loan, to be backed by the Small Business Administration. (Side note for mompreneurs: the SBA doesn’t actually loan money to entrepreneurs. They offer protection to the bank in case the entrepreneur defaults on the loan. It’s a way to make it less risky for banks to take a chance on entrepreneurs).

My banker was fantastic. He did everything he could to help me get the loan. Unfortunately, what he couldn’t do was create cash flow for me. Before banks will give you a loan, they want to see that you have enough cash flow to pay back the loan. Of course, if I’d had cash flow, I wouldn’t have needed the loan!

My sales from SkyMall were great, but I hadn’t started another run with them yet as I was building back up my inventory. Despite my proven potential, I didn’t have immediate cash flow.

Rejected, I went to Plan B.

Advice for Mompreneurs: Motivation to Launch Your Company

YoAdvice for Mompreneurs about Launching Your Companyu’ve done your market research, set your time and dollar budget, and are ready to launch your company.

So what are you waiting for?

It’s scary, isn’t it? All entrepreneurs have been where you are right now. Eager and excited to take the plunge; deathly afraid of failure. When writing my book, Think. Create. Sell., The Insider Secrets Your Best Friend Would Tell You About Entrepreneurship, I asked other entrepreneurs what advice they’d give their best friends about launching their companies.

Here are a few of the best responses; I hope they help you gain your motivation:

What would I tell my best friend if she were thinking of launching a product? I would first ask her three questions: Is there a need for your product? Is there a market for your product? Would you use your product? If she can answer “Yes” to all three, I would encourage her to move forward.

Kathy Baker
Founder
Vanity Fixes, Inc.
http://www.bralief.com

My best friend is also my pastry-chef, so she has heard all of this already, but what I would tell her about launching a product is: Go for it! Take every skill you have and figure out how it can help build your business, come up with an amazing, unique idea and get out there.

Mari Luangrath
Founder
Foiled Cupcakes
http://www.foiledcupcakes.com

Mompreneur Example: What I learned from “Negative” Market Research

[tweetmeme]Those of you who have followed my Stikitty journey know I didn’t listen to my head, just my heart when I first launched my entrance mat product in 2009. 

That’s why when it came to the Stikitty, I was adamant I wasn’t going to make the same mistake twice.

Instead of trying to convince myself and others that the Stikitty was a good idea, I started from the opposite perspective. I told myself that the world didn’t need another cat litter mat. I did full-time research for weeks and used inexpensive market research resources to see if I could prove my negative hypotheses. I knew if I could prove them, that my idea wouldn’t stand the test of time–or a limited budget!

Market research provided guidance for the Stikitty's retail packaging.

Below are examples of my hypotheses and what I found through research:

The Pet Industry is Saturated & There’s No Room for Growth

Through my alma mater I was able to gain online access to industry overviews, articles, and snapshots on the pet industry. I found the Datamonitor reports especially helpful. In addition to industry information, I looked at the strategic and financial performances of key companies.

I found that the $45 billion pet industry has grown for the last 7 years and it is projected to grow for the next 5, albeit at a slower pace. There are extremely large competitors but the industry is fairly fragmented with the top companies commanding only ~35% of the market. New companies are able to thrive with strong branding and good sales strategies.

People Only Spend Money on Dog Products

Through networking, I connected with a retired high-level executive from a leading international pet company. He told me it’s true that the biggest chunk of the ~$10 billion pet supplies sub-segment goes to the dogs; specifically to dog toys, collars, leashes, and more. However, when cat owners spend they spend big on litter and litter supplies–to the tune of nearly $1.9 billion annually.  

No One Wants a New, Different Kind of Cat Mat

This hypothesis was critical–if I could prove that no one needed or wanted a more advanced cat litter mat, I would have to stop right there. Because I knew direct customer insights were crucial and I couldn’t afford formal customer research, I used what resources I had available to “hear” from as many cat owners as possible. So, I:

  • Conducted dozens of in-person focus groups with family, friends, and neighbors with cats; I asked them about their current litter mats and what they’d like in a new solution
  • Visited large and small pet retailer Web sites to read online reviews of cat litter mats
  • Lurked on pet forums to learn of frustrations about cat litter tracking and possible solutions
  • Polled contacts in my LinkedIn pet groups
  • Asked friends on Facebook to ask their friends about cat litter mats and how they’d make them better

What I Learned from Being Negative

I learned that the pet industry is more recession proof than others and it is projecting growth; that cat litter products are a strong segment within this very large industry; and, that cat owners are eager for a lighter, easier to clean cat litter mat that is the right size for their specific needs. I found that cat owners were open to something different and if it solved their issues with traditional litter mats (e.g., too heavy, too hard to clean, not large enough), they would buy something innovative. Additionally, I found a lot of practical information such as how to price my product, which retailers carried competing products, and how to package and display the Stikitty.

Though I wasn’t able to completely fool myself, looking at my product idea from a negative perspective allowed me to listen to my head. I was able to step aside and bring my future customers’ needs and desires to the forefront. I was able to look at things from a business perspective.

I wish you the very best of luck with your venture. If you’re ready to share, please let me know what you’re up to, too!

The next post will be about the 5 Things You Should Do Before Launching Your Company

7 Mompreneur Tips for Market Research on the Cheap

[tweetmeme]Especially if you’re boot-strapping your business, it’s easy to convince yourself that you can’t afford market research.

Don’t fall for it.

Before you go into production of your product you need to understand your market and how it will respond to your offering. Market research can help you answer many critical questions such as who your target audience is; what needs do they have; whether competing products are solving their problems; if not, how will your product do a better job;  how much will your audience pay for your product; etc.

If you can afford to hire an advertising or research agency to test your product or service idea, go for it. But if you can’t, try some of these inexpensive tips to get important insights before you spend your first dollar:

1. Get your hands on an industry report.  

Industry monitors provide critical information about whether your industry is growing, how big your segment is, the key players, and more. Some of these monitors can be quite expensive but you may be able to find full reports or snapshots of your industry online. Your local library or alma mater may provide free access to subscription services that carry these full reports too.

2. Read reviews of competing products online.

Online reviews are goldmines of information because they’ll tell you what real buyers like and find lacking in current offerings. Often, they’ll tell you customers’ perceptions of the product’s value for the money as well. And you’ll know which retailers carry products like yours.

3. Conduct your own focus group.

If you’re creating a product based on something you need and can’t find it’s a good bet that the people you associate with may be in the same boat. For example, if you’re a computer programmer who sees a need for an ergonomically correct armrest, your coworkers are probably computer programmers with arm strain too. Get a group of friends, family, and co-workers together in person to talk about your idea. Sure, in the beginning they’ll all say it’s a wonderful idea, but dig deeper and ask specific questions. Be sure to listen with a critical ear–you’ll be surprised by what you learn!

4. Facebook your friends.

With the new features of Facebook, you can easily limit the views of your posts. Share your product idea and ask for genuine insights from your friends.

5. Ask the social world for feedback.

Several sites like LinkedIn and WordPress let you create online polls. If you’re comfortable sharing your idea, ask your connections to give you specific feedback, including how much they’d pay for your product. You can also mask your idea by asking what your connections like or don’t like about what’s currently available.

6. Check out SCORE or other startup associations.

SCORE started out as the “Service Corps of Retired Executives.” The organization counsels small businesses and their mentors can help you put a magnifying glass on your idea and examine it from an experienced businessperson’s perspective.  And, if you make the decision to move forward, they’ll provide you with inexpensive training on starting and growing your company.

7. Visit an industry trade show.

While displaying in a trade show can be quite expensive, attending one is usually a lot cheaper. This is especially true if you don’t have to travel to the show and just have to pay the price of an entrance ticket. There are a few types of trade shows; some target end customers and others target retail buyers. By attending either of these, you can gain a lot of information about what types of products are hot and what consumers or buyers are looking for right now.

In the next post, we’ll talk about the dreaded B word — the business plan!

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