Danish projects are flooding crowdfunding platforms. Two DTU students talk about a fantastic—but nerve-wracking—way of financing an idea.
In early December, a DTU student succeeded in collecting more than DKK 1 million on the crowdfunding portal ‘Kickstarter’ to finance work on his Sitpack telescopic chair. Previously, the team behind the Airtame HDMI dongle—one of whose members was a DTU student—set a Danish record when it succeeded in raising around DKK 7 million on the portal ‘Indiegogo’.
Projects like these have demonstrated that crowdfunding is a magnificent way to create a company on the basis of a good idea. But what the press coverage and award-ceremony speeches often fail to mention is that successful crowdfunding also means a lot of hard, lonely work. Frederik Ploug Søgaard, President of the Danish Crowdfunding Association (website n Danish only) explains:
“What the people who succeed with crowdfunding share is the fact that they have only reached their goal by looking after their campaigns as if they were Tamagotchi toys that ‘need feeding’. And, of course, it is only after the campaign that the really hard work begins. You have to finish developing your product, package it and ship it to all four corners of the globe.” He continues:
“You’re usually prepared for a complete disaster when you launch a campaign. But achieving an Airtame scale success brings its own set of challenges. What happened here was a group of young guys with only limited entrepreneurial experience suddenly found themselves holding DKK 7 million. And how do you deal with that?”
Learning by doing
Marius Klausen, DTU student and co-founder of Airtame, relates:
“The success we achieved was overwhelming. But I think we took a realistic view, and realized that the hard work was only just beginning—because crowdfunding is a special situation: you make half a product and then convince the world that you can finish the job. You tell them that your product can do much more than it actually can at that point in its development.”
"You make half a product and then convince the world that you can finish the job."
Marius Clausen, Airtame
The Airtame dongle will soon be on its way out to customers.
The Airtame team launched its campaign on Indiegogo in November 2013. Since then, the company has received orders for more than 21,000 Airtame dongles. Up until December 2014, when they started to ship the first products, they have had to postpone delivery on several occasions due to both hardware and software challenges. In fact, the software still has to be developed further before Airtame can live up to the promises it made in the campaign.
“We were still wet behind the ears when we started out, so it’s been a matter of learning by doing all the way. We’ve had to do everything for the first time, everything has changed along the way, and we are constantly under pressure from the people who supported us. If we hadn’t gone down the crowdfunding route and taken on this kind of time pressure, we simply wouldn’t have been ready to launch for another six months or even a year,” says Marius.
Watch video on Airtame with English subtitles
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Major vote of confidence
Airtame is currently on its way out to its backers. The last software updates can be dealt with via the Internet, so there shouldn’t be any problems in that context. Theo Fischer Ginmann, the product developer working on the Sitpack telescopic chair, is at a different stage in the process. Following his autumn campaign, he is faced with the challenge of finishing work on developing the chair. He is confident that he’ll be ready over the course of the spring. But of course, there is always the risk that he won’t succeed.
“If we withdraw the funds and something goes wrong, we’ll end up having to foot the bill ourselves—and then face the problem of having to start again to find another source of financing. Fortunately, the Kickstarter rules state that we’re not liable for anything, but it would be a humiliating start for something that could go on to be really big,” says Theo.
The telescopic chair, Sitpack, has been tested at Roskilde Festival.
Theo Fischer Ginmann confirms that crowdfunding is an exercise in trust, and that the huge wave of confidence they have encountered demands a special level of input in developing the telescopic chair.
“More than 2,500 people have lent their support to Sitpack. And if we fail to live up to their expectations, we will have 2,500 disgruntled investors telling their family, friends and acquaintances what a bad product it is. So we have to do our work thoroughly, and make it absolutely clear that we can’t be rushed if we are to deliver a good product.”
Article in DTUavisen no. 1, January 2015.