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Over the last few years, crowdsourced and crowdfunded products have started to gain mainstream recognition. Visible successes like the Pebble smartwatch and Quirky’s Pivot Power have given the industry more credibility when it comes to creating useful and interesting products.
Currently, however, services that make it easy for consumers to find crowdfunded products in one place are almost nonexistent. Quirky is one of the few marketplaces that features such projects. Shapeways, which uses 3D printing to bring entrepreneurs’ ideas to life, also offers customers the ability to browse a growing number of user-created products – some crowdsourced, others not.
Both platforms have their advantages and disadvantages. Quirky finds product ideas and tests the market for the proposed products, but only a small number gets produced, leaving the majority of entrepreneurs looking for other platforms to test their ideas. Shapeways, on the other hand, can make products that come from anyone skilled enough to use 3D modeling software, but can only use 3D printing in manufacturing its products. Both Shapeways and Quirky focus on very specific aspects of crowdfunding, and are unable to produce films, books, video games, and a large variety of other kinds of products.
It should be no surprise, then, that e-commerce platforms dedicated to crowdfunded products have recently begun to pop up. At their core, they aim to answer the question, “What next?” that owners of successfully funded projects need to answer if they wish to turn their one-time campaign into a sustainable business. Indeed, one of these platforms got its start when Matthew McLachlan, the entrepreneur behind SoundJaw, a sound-amplifying gadget for the iPad, saw sales slump after the Kickstarter campaign came to a close.
McLachlan and his brother Mark decided to create TinyLightbulbs, Mark told Good.is, to become the “go-to place for ‘I saw this project on Kickstarter. It’s ended now. Where can I find it?’”
Along with hosting the products on its marketplace, TinyLighbulbs also writes reviews, posts Google and Facebook ads, and contacts bloggers about potentially interesting products.
FundedGrads, another e-commerce platform for crowdfunded projects, will take a similar approach. It will offer daily deals and discounts, in addition to hosting the products on its platform. It also plans to tap in to the strong community aspect of crowdfunding by using some of its revenue to fund new projects that the site’s visitors wish to support.
Another e-commerce platform, scheduled to launch in September, is CrowdHut. Philip Reicherz, founder of Magnolia Ventures, David Borish, founder of Sell Your Stuff, and Eric Koenig, a business consultant and entrepreneur, started the platform in May to help turn a crowdfunded product into a more sustainable source of income for its creators, as well as help crowdfunding mature as an industry.
“We realized that in order for crowdfunding to grow, there was a need for a distribution side,” Reicherz told Crowdsourcing.org “Our initial focus will be to formulate relationships with all of the platforms that are out there. This will allow the entrepreneurs to very easily transition over to our platform for distribution.”
In its first phase, CrowdHut will feature an e-commerce platform and an affiliate marketing program. In the future, it will also take advantage of franchising, direct-response marketing, and traditional mass-market retail to help crowdfunded products reach the right consumers. While the initial criteria for a product getting onto CrowdHut will be its ability to successfully raise money through a platform, the way the product is marketed will be “on a case-by-case basis.”
CrowdHut’s e-commerce store will be fairly straightforward – a searchable online marketplace for crowdfunded and crowdsourced products that can be filtered by different categories. At the launch, the CrowdHut team intends to sell five primary kinds of products: art and design, publishing, entertainment, technology, and food. When the need arises for new categories and subcategories, they will be added.
The affiliate program will also function in a standard way. For example, “if an article is written about a particular product,” Borish said, “the person writing the article could easily go to our affiliate network and put the affiliate link into the article.”
If a product seems to best fit into the franchise model, CrowdHut would offer its team members’ expertise and connections to ensure that the product could successfully transition to that business model. The team would take a similar approach with direct response television marketing (DRTV) – most recognized in the form of infomercials.
“Regarding DRTV, even though you still see infomercials on television, much of the success in that industry is based on retail,” Borish explained. “Big retail stores, even Wal-Mart, are including ‘As Seen on TV’ sections because the marketers are spending so much money on advertising, they know people are going to recognize the product.
“We also have strong relationships with the Home Shopping Network,” he continued. “We can easily pitch an infomercial product to the network, and they can also help us drive it into retail.”
In other words, CrowdHut will offer a number of marketing options to owners of successfully crowdfunded products that the entrepreneurs may not have considered before: “Not every product is going to fit into every model,” Borish summarized. “What we’re basically doing is taking the relationships and experience of our team and assisting companies and crowdfunded products.”

CrowdHut’s creators recognize that many crowdfunded projects are successful not only because they are useful or appealing, but also because the backers like the narrative surrounding the campaign.
“Each product that is on these sites has a story, and what we would really like to do is carry that story onto CrowdHut,” Borish said. The team hopes to do so by establishing an early connection with a product.
“Ideally, you would have an introduction to CrowdHut very early on,” Reicherz explained. “The company would say, ‘Our Widget XYZ is going to be listed on CrowdHut in the next 30 days, please notify all your friends and family!’ The friends and family help with funding, and we want to utilize those same people to help with the aftermarket distribution, as well.”
Aside from providing access to various marketing channels, CrowdHut will also supply product fulfillment services – storage, processing, shipping, and handling. As some products may not be as immediately successful as others, CrowdHut will offer group pricing to entrepreneurs.
“It’s all based on numbers,” Borish said. “Because crowdfunded products are typically one-off products, they are not going to be able to get the rates that a store would be able to get from a fulfillment center. Through us, they can take advantage of group pricing for their fulfillment.”
For its services, the platform will take a percentage (which has yet to be determined) of successful sales.
While crowdfunding is becoming a more popular practice, it remains to be seen whether consumers will seek out platforms like CrowdHut to purchase goods just because they were crowdfunded, or because the products, individually, are appealing. The CrowdHut team believes both are key to its success.
“I would say it’s a combination of the two,” Reicherz said. “Many folks just didn’t know where to get some pretty decent, cool products that have come off these platforms. So the idea was to drive people to see the interesting products.”
“If a product was successfully funded and the team behind it was capable enough to bring it to the market,” Borish added, “to us, is a good first indication in trying to find out if the product can be a huge success.”
Though CrowdHut seems to have the marketing figured out, in the larger crowdfunding ecosystem, many more services need to be established to make it easier for entrepreneurs to bring their successfully crowdfunded products to the wider audience.
“I think in that gap between the product being funded and the product being distributed, there is a tremendous potential for growth,” Reicherz said. “There is a great opportunity for serial entrepreneurs to start consulting services for companies that have successfully received funding on platforms and help them through the earliest parts of design and fulfillment.”
Will CrowdHut look to fill that space? Reicherz does not foresee it in the near future.
“At this point, the idea is to remain agnostic,” he said. “For us to step into the consulting role, I think, might be muddying the waters.”
CrowdHut looks to launch this fall. Until then you can follow what crowdfunding projects they’re currently following with interest on the company blog.
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