How to Run a Successful Kickstarter Campaign (From a $60M Pro)

0:00I'd made 70 grand as a construction engineer, and then all of a sudden I had hundreds of thousands of thousands of dollars and great margins.

0:11Peak Design runs some of the most successful crowdfunding campaigns in the world. They've raised over$60 million on Kickstarter. It became the number two most funded Kickstarter of all time at the time. It crushed it, man. The brand is known for their bold designs and innate attention to detail. And this year, the team will surpass the$100 million mark in annual revenue. Harrison Ford now has walked into our Peak Design store in Venice Beach three times. Founder Peter Daring continues to push the boundary on what your bags and camera gear can do in addition to leading the charge with his initiative, the Change Climate Project.

0:48Hey there, I'm your host, Adam Levinter, and this is Shopify Masters, your companion for starting and scaling a business. Peter, thanks so much for being here. Thanks, Adam. Pumped to be here, man. How do you explain the business to a layperson or to your mom? It's getting harder and harder every year as we continue to branch out. You know, we started as a photographic accessories designer and maker. We're still that, but we've expanded a lot. We got into bags in 2015, and now we make both bags for photographers and for not photographers. The theme that ties them together is feature-rich, but elegant kind of in their aesthetic, and a minimalist-looking aesthetic, but really technical, extremely thoughtful in the details.

1:32Then we have a whole other line of products that surrounds mobile phones because phones became very competent cameras kind of in the mid-2010s, and it was incumbent upon us to be the best camera accessory maker out there. So that, to my eye at least, meant we had to make mobile phone accessories. So we have a whole suite, but that kind of crosses over into more lifestyle products as well. So that's kind of where we're situated today. Where does the passion for design come from? You know, I guess I was kind of born with it when I got asked that question, what do you want to be when you grow up?

2:03When I was a kid, I always said, I want to be an inventor. And for me, it was more about that mechanism design and function that really drove me. As far as aesthetics go, I think I developed that sense perhaps over time. And thank goodness, you know, surrounded myself with people who also have a real keen aesthetic sense. You combine those two things, and I suppose you get peak design. Pre-peak design, you were a construction engineer? I was, yeah. So I studied civil in school. I wanted to, you know, inventor. It's funny that I didn't go the mechanical engineering route. I think, you know, when I was at school, I got a little bit waylaid by the idea of like what it would be like to construct bridges and skyscrapers.

2:48And so I did chase that passion for a while and I actually had a blast doing it. I have so much respect for construction, for the built world. It's a massive part of the economy. And if you know how to build a building, there's just so much you know how to do. And so the reason that I pivoted back toward kind of the original passion invention was because I wanted to work for myself. And I didn't want to go the contractor route. It's a low margin business. It's terrible hours. It's really hard. And it doesn't quite allow for the creativity that I really wanted to bring into my career. Post-construction engineering, you take a year off, you travel the world, and the idea for Peak Design starts to percolate?

3:34Almost. I actually was so bold as to ask for a leave of absence after 19 months in the construction field. And they said, you want to do what? It's not very progressive, let's say. But I did. Anyways, they did let me go. And so I went back to work for them after that. But I spent four months traveling Southeast Asia and India, mostly on motorcycle and just finding my way. And that just spawned an incredible breadth of things I wanted to do in this world. Many of those things would eventually become peak design. Your passion for entrepreneurship. Where does it come from? You know, I think it might actually come from my dad if I really search it.

4:15He was not an entrepreneur. He was a firefighter. The reason I say that is because my dad has always been very independent, kind of fiercely independent. And I think that is what drives entrepreneurship in me. I always wanted to be my own boss. And when I was traveling for four months, I was my own boss. I was in charge of my own time. And I really feel like there's not much more that feels freeing than that feeling of being in charge of one's own time. And so more than anything else, that's what I just wanted to be my own boss. So when you got back from that trip, did you say to yourself, I want to create a product business that lives on the web?

4:56Did you say to yourself, I want to become this sort of multi-channel brand at some point? Hell no. Did you have any overarching goals? It was, you could call it naive or honest. I'm not sure which one, but it was one of those two. I wanted to invent a product that would help solve some of our energy concerns. I actually, the first capture I created was I got a provisional patent for a system that captured energy from trains that are coming into stations, store that kinetic energy and release it. It was also a naive idea, but I had these other ideas. One was for a tripod that would collapse onto itself better.

5:36One was for this camera clip. And I actually pursued the train idea for about a year while I was still working construction before it was apparent that it was much too difficult, very naive to think that I could bring that to market. So I kind of fell back on this idea of a clip that would allow me to carry my camera on my backpack strap hands-free and rigidly supported. it. I was solving a very specific need that I had encountered while traveling, which is I got a camera with me all the time. I got a backpack and it's a pain in the ass to have this camera banging on my chest. And so solving that need, it struck me as something that, like your question was, did I think about a go-to-market strategy?

6:23I think about a web baby. Hell no. I didn't think about any of that. I thought simply, this is a mechanism that if I made it and did a good job of it, I think I could sell it. No consideration of where I might sell it. Got it. But Kickstarter plays a major role. Yeah. Right. And it has throughout the history of the company. You've raised over$60 million on Kickstarter to date. Your most recent Kickstarter, I think, generated north of 13 million. It's incredible. I think Peak is actually one of the most successful Kickstarter consumer brands ever. Your very first Kickstarter campaign, Was it a surprise to you that it was a success?

6:59It was definitely a delight. So Kickstarter came on my radar. I had already quit my construction job and I was a year into making this thing. It was January of 2011 and I had tooling that was being cut overseas in China and I was ready to start like, okay, how am I gonna sell these things? And Kickstarter, I just heard of it for the first time, heard about it again later in that week, checked it out and said, oh, this is perfect. This is exactly what I'm doing. So just unbelievably dumb luck that the timing of Kickstarter converged with the timing of me launching a product. When I looked at the projects that were happening on Kickstarter, it definitely felt like, hey, this thing that I'm making is completely novel.

7:41It does not exist. It solves an obvious problem. And the type of photographers show up on this new nascent website called Kickstarter. I think this thing's going to kill it. So you asked if I was surprised. I was actually really confident that it was going to succeed when I put it there on Kickstarter. And it crushed it, man. It became the number two most funded Kickstarter of all time at the time. I mean, I can't tell you what that felt like, selling 5 ,258 units on that Kickstarter and having$365 ,000. I'd made 70 grand as a construction engineer. And then all of a sudden I had hundreds of thousands of dollars and great margins.

8:24My net profit on that first year ended up being like$700 ,000 in sales. And I was profiting 30%. I wish I could have that kind of profit number nowadays. It's a long, long gone are the days, but I was just off to the races, man. It was so fun. Yeah. And the company's north of a hundred million dollars in top line revenue. Yeah. Finally, we finally kind of crested that, that nine-figure beast, and very proud to have done that. We'll hit that this year for the first year. So do you see Kickstarter as the main contributor to that growth? It's really one of the fundamental building blocks of Peak Design.

9:04I think that the products that we've made would have been successful outside of that, but the brand that we have created is so deeply intertwined with crowdfunding and the expectation that Peak Design is going to show up here with innovative products and deliver. Not quite on time. We rarely did, you know, but pretty damn close. And certainly when we have delays and things like that, we are extremely open and transparent with our customers about it. So it's a massive part of how we've grown and how we've gotten here. For founders that have not ventured onto Kickstarter or Indiegogo or these platforms, you're a veteran at this point.

9:42What are the pillars of a successful Kickstarter campaign? Can you point to a few things? I want to be clear. Kickstarter is really, it's kind of a go-to-market plan, right? It's a sales channel. Let's be clear about that. It is not a place to test out ideas and say, I wonder if people will like this. The same things that will garner success in any other sales channel are the things that will garner success in Kickstarter. The unique things that you get with Kickstarter are, number one, you're getting the money up front, right? You're getting it ahead of when you would typically get the money in a transaction.

10:19That is extremely beneficial to cash flow. And I can talk more about how that has allowed Peak Design to stay completely investor-free 15 years into this. But the other thing you're doing kind of in exchange for that is you're giving your backers a significant discount at the beginning of a product lifecycle, which is almost unheard of, right? Obviously, when you're launching a product, typically you have some amount of pent-up demand, and that demand is willing to pay full price. We're exchanging, we're giving some amount of discount so that we can bring that money in earlier, bring the revenue forward, and then also just create more push, more momentum, more steam for these products.

11:03So there is a give and take. And, you know, I've never run a business any other way. We've launched our significant products on Kickstarter, and that's all we've done it. Who knows how this world would have panned out had we just launched it the more traditional way? Would it have been bigger? I doubt it. Do you think Kickstarter is an effective marketing channel beyond simply being a sales channel? The reason I ask the question is because those consumers, they're early adopters. They're buying in, right, in exchange for a discount or belief in the product or whatever. They can effectively become marketing organisms themselves and start to spread word of mouth.

11:40Absolutely. Do you see it that way? Oh, definitely. And this is the thing, you know, Kickstarter, I think the number of people that are backing Kickstarter projects has kind of somewhat plateaued. I think Kickstarter was so successful at getting their brand out there that they kind of netted the type of people who are willing to back projects on Kickstarter. But this is a very engaged community. There's a huge overlap between the types of people who show up on like our Reddit subthread, where it's just a type of consumer that just cares so much more than your average, hell, I'll buy it on Amazon type of thing.

12:16So yeah, it has fostered an awesome community for us. So this Kickstarter Indiegogo campaign strategy launches, it seems like Kickstarter Indiegogo, those companies, these platforms had their peak, pun intended, their peak, their moment in time, circa 2016, 2017, 2018. Not so much anymore. Where are these platforms now? And I mean, you're still leveraging them. They seem to be incredibly effective, but they seem to have had their heyday. I think they had their heyday, certainly in terms of kind of cultural relevance, because there was the novelty and the newness of it. Of crowdfunding. Of crowdfunding.

12:50Yep. I think that from the actual participation, it's been more of kind of a plateau, which is totally fine. It's absolutely substantial enough for us to still keep going back to that because it is that really active consumer base. I think, though, also, if you look into it, it's really shifted towards games and fantasy stuff. I feel like the people who are still gravitating there are more online, more deeper in the internet, kind of a more creative, nerdier type bunch, but it's still a thriving customer base. You know, over the course of the last 10 plus years or so, certainly a lot has changed with regard to crowdfunding.

13:26You had a pretty successful campaign, 13 plus million back in June of this year. So what did you do well? And did you change anything up? Yeah, obviously, we did the best we've ever done. On the one hand, we had almost 13 and a half million dollar campaign. But we changed something quite sincerely with this one. That is what we're calling it the omni channel sandwich, whereby we had a campaign 1200 rewards, we said, you're going to get them first. Small discount, you get them first. Then, folks, we're going to go live in our stores with our retail partners. We are going to put these things up for sale at full retail price on June 17th.

14:07After that, when we have sufficient stock, and as soon as we do, we are going to fulfill the wait and save rewards, which are the bulk of the rewards. We've never done that before. Always it's been Kickstarter backers get their products first. We obviously communicated this as kind of as loudly as we thought we needed to. It was right in the reward, but it's just not the way that we've done things before. And I think that some people were surprised by it. And moreover, this new roller bag is really hard to make. No one's ever made a roller bag like this. Fundamentally new construction type, totally different hardware set.

14:42We're not off the shelf parts, fully custom. We experience delays, which are largely a result of such high volumes, and our best guess of being completed with fulfillment in the August and September timeline for second wave fulfillment has pushed. It's pushed from September to October. That's a month delay. Normally, that would be an acceptable thing. But I think the fact that we are now on sale in stores for people who are willing to pay full price, I think that's rubbed a lot of the Kickstarter backers the wrong way. But if you think about it from Peak Design's perspective, so long as we can kind of manage the customer sentiment and we haven't burned too much goodwill with that, we're on sale during the travel season with our most important product.

15:32We pulled so much of that revenue forward, and it's been massively important to us just being able to kind of make ends meet, frankly, as a company. A lot was riding on this campaign. So we're still dealing with the consumer sentiment fallout. We're not 100 % fulfilled yet. That's going to happen mid-October, where we'll be completely 100 % fulfilled. But, you know, I think that many Kickstarter brokers might expect me to say, yeah, we'll never do that again. We'll reward bulls**t. We'll do that again. We will because the simple fact is the world has been producing peak design roller pros as fast as it possibly can.

16:10Two factories jamming, a complex supply chain. We started making these bags in January, and we still have not been able to catch up with initial demand. So if I were to have waited that whole time, there would have been so many lost sales. and especially in this year when we had the tariff situation come in, I'm very glad that we decided to do it the way we did. So you mentioned Kickstarter being a contributor to the growth of the business. You've not raised$1 of outside venture money to date. Correct. You're north of 100 million in top line revenue. You're now in a number of retailers. You have your own stores plus the retail relationships.

16:51I would think hugely capital intensive, frankly, for any business. Talk to me about the relationship between the growth of things, profitability, and why you continue to not raise. Well, I think the reason I continue to not raise is the same as why I started in the first place. I don't want a boss. Having an investor seems pretty akin to having a boss to me. Just having that extra layer of people that you have to answer to. Now, don't get me wrong. I feel plenty of responsibility. I really feel responsible to my employees. sometimes i question whether or not you know going it alone continuing to go it alone not taking on that outside capital or help is it jeopardizing us could we actually advance our cause further if we raised yes potentially but it would add pressures on the business that are ones we haven't had before and it very well could change the culture which is a very employee forward culture In fact, the stated purpose of Peak Design is for the employees of Peak Design to live happy and meaningful lives.

17:51I'm not sure you get to maintain that purpose and really live by it when you've got a group of private equity investors who are like, clock's ticking, we're going to transact again in four years. I've learned enough to kind of know how the game works and think I'm not very interested. I also think that the business case that I follow most closely is Patagonia's story. And I think many a fool has probably tried to compare their business to Patagonia or to Apple or these amazing businesses that are totally unique. But Chouinard held on to his whole company for all time, and it was a very profitable model for him.

18:31So it's not some idea that I don't want to have a profitable company. I do very much. It would just be nice to be able to maintain the control. And talk to me a little bit more about that team culture. So beyond creating a culture that allows your employees to live these impactful, meaningful lives, what else are you doing internally to create such an engaged company culture? Well, I think that for the early years of the business, I really focused on, well, initially both hiring my friends, but then also just developing real and deep friendships with the people that I hired, who of course I didn't know before Peak Design.

19:12And it's obvious that we spend the majority of the time that we have on this planet, at least in our adult lives, working. And so it always struck me as quite obvious that we should be trying really hard to make these relationships be meaningful and have a blast. I mean, I'm also kind of betting on no heaven, no hell, hopefully, too. That means one life to live, and I want to enjoy it. And I want those around me to have that same level of enjoyment. And so that has driven so much of the culture. Obviously, we're bigger now, right? We're not going to be best friends with everybody at the company.

19:49But still, like most people, it takes a while, I feel like, to kind of break into the culture at Peak Design. But once people do, I think it's very open. It's very accepting. It's diverse. And it's really genuinely focused on people having a great experience working for this company. I just want people to like me, Adam. At the end of the day, you know, maybe it's actually thin skin that drives it and a fear of, I don't know, people not liking me, but something's working with it. Well, I mean, I think it's a smart strategy given the fact that we're in an era where loyalty to companies is at its lowest level, I would say, over the years.

20:31I mean, it seems to me that, you know, unless this younger generation of employees feel really engaged, really tied to the mission of the company and what you're building, they're simply going to leave. So I think actually it's smart in terms of retention and engagement to pursue the cultural strategy that you have. in addition to sort of the creation of the environment that you want there, talk to me a little bit more about the culture of transparency that you have, you know, sharing revenue figures with everybody, sharing profit figures, all the rest of it. I think it just comes from a philosophy, call it the truth will set you free.

21:10I don't have anything to hide. I've never done anything fundamentally bad or wrong or evil or not justifiable. I've made mistakes for sure, but it's easy to be transparent about that. And like, it's just an easier way to live life. If I have a piece of information that I don't feel like I can share with the people who are willing to work for my company, I just, I haven't encountered such a piece of information yet that I'd really feel bashful about sharing. And having said that, I have learned that at a, you know, a company that now has 90 employees kind of stateside in Europe, another dozen in Asia, another 70 working as contractors in the Philippines for a bunch of different business needs.

21:52Like there are different audiences for different pieces of information, but there is, I think practically nothing that I wouldn't share in a one-on-one conversation. And I think it's just like, even in, you know, we have fireside chats, we have, and it's Q &A where it's kind of asked me anything. And I still, I have not encountered a question that I won't answer full-throated because it's got to be defensible. Where does the passion for sustainability come from? Does it come from watching companies like Patagonia get built to that level of brand recognition and global? It comes from a deep appreciation for energy.

22:35And what I mean by that is like actual physical, energy in like, I remember going through physics classes in high school and just being completely awestruck about the journey that I think actually fossil fuels are one of the most incredible things, right? Solar radiation comes down as a result, you know, that's solar, gravity creates stars, tons of gravity pushes together, shoots out solar radiation. It lands on some atoms here And those things get together and they create life and they absorb energy and they fight entropy. It's like an unbelievably beautiful cycle. I absolutely am fascinated by the journey of energy.

23:19And I encountered those words sustainability in kind of late in college, trying to work with sustainable architecture. And so I was a lead AP, a green building kind of expert early in my career. and I have just always been fascinated with the idea that, okay, cool, one planet. Well, there are more planets actually, but probably going to be one that we're working on. And climate change is, it is the problem of multiple generations. We will be going through this problem. I do believe that we will be adapting to it in all sorts of ways. We're not going to solve. It's not a solve thing, right? It is a, how do we live with this?

24:02How do we mitigate its effects to the best degree possible? How do we predict what it's going to do? There's so much, like, there's so much that is unknown, but there's so much that is known as well. It is deeply bothersome to me that we are, we are still spending time on the question of whether this is a hoax or real. I mean, greenhouse gases absorb energy. It is as fundamental as dropping a hammer and having it hit the ground. And so I think that the business communities have a responsibility to do what they can to do the least amount of harm possible. So in that, you're going to find a ton of overlap with what Patagonia and other companies that have cared deeply about the environment have.

24:45But the place that it comes from is really an appreciation for energy and really gratitude for what 4 billion years of this planet's existence and the evolution that is acquired. I'm just remain awestruck by the luck of life. And I would like it to continue. And to double click on this, the Climate Change Project is something that you're pursuing internally at Peak Design? Yeah. Well, it's something that Peak Design created. I got together with the founder of a company called BioLite in 2018 and joined up with a guy named Austin Whitman. And we created an organization that at the time was called Climate Neutral.

25:24Subsequently, it's called The Change Climate Project. And we now administer something called The Climate Label, formerly Climate Neutral. It's an incredible program. There's over 300 businesses that still, despite the business climate today, which is very challenging to push sustainability agendas, it is the most robust climate certification that a company can attain. It specifically requires that companies measure their carbon footprint. We've created an amazing software tool that is very, very inexpensive to use. We have requirements around ways that companies need to reduce their carbon footprint, but then we create what's called a carbon transition budget.

26:03So we make sure that companies like Peak Design, we have a footprint of about 20 ,000 tons this year. We are required to spend$350 ,000 on carbon mitigation. That can be from within our value chain. Think about installing solar panels on our factories over in Asia. Or we can also put that money beyond value chain investments like carbon offsets, obviously ones that are certified and vetted, not the junk that exists out there. So this program, this certification called the Climate Label exists on 350 brands. You've probably heard of some of them. REI is our biggest company that has joined the Climate Label.