The Pre-Launch Strategy That Helped This Brand Raise $2.8M

0:00We asked people to put down$50 deposits on Shopify to voice their support of the product and show that they were actually willing to pay for this solution. And so that was two years ago that we launched our first pre-order campaign. And what's really encouraging to me is that a lot of those customers have actually stuck with us. Hello, welcome to Shopify Masters, your companion for starting and building a business. I'm your host, Shuang Esersham. You don't actually need a perfect prototype before you start a business. In fact, Hearth Display says building in public has been key to the company's success.

0:38Hearth Display built both hardware and software for a touchscreen bulletin board that can help busy families organize schedules and chores. The founders knew that venture money rarely goes to female founders, so they launched a crowdfunding campaign to get pre-orders for their prototype. The Indiegogo campaign raised more than$600 ,000 and helped them find beta testers. Co-founder Susie Harrison is joining us today to tell us about the pre-order and testing process. Welcome to the show, Susie. Thank you. Thanks so much for having me. So happy to have you here. Can you tell us initially, how did you go about building a community that can support this idea?

1:22I think it was really important to us to build really, really closely alongside our customers. Our customers are families who typically have two plus kids, typically ages four to 11. That's really where we see the pain point that we're trying to solve appear most acutely in a family's life. When a kid is somewhere between four and 11, you see that their activities start to expand. You see that they start to have semi-autonomous schedules where they have soccer practice. They have doctor's appointments. They obviously have school. They have all these different things going on. And when you have multiple kids that are engaging in various activities, we see that family management gets extremely chaotic.

2:05And yet what we found is that even though family life is chaotic and hard to manage and overwhelming, families are still using the same archaic analog tools today that they were decades ago when I was growing up. It's the same tools my mom used to raise me that are being used today, which are things like whiteboards, chore charts, sticker charts, et cetera. And so when it came to trying to solve that problem and change the way that families are managed and actually create more equity in the home in terms of who is actually doing the management of that family, we first started talking very closely with our customers and with potential customers to really understand those pain points and better understand how we could solve them.

2:49We did that from the very early stages by creating Facebook groups. We have two private Facebook groups currently with thousands of families in there every day that we're in constant dialogue with, learning about the problems that they experience every day, what solutions would serve them best, their feedback on features as we continue to build them, what they're looking for in terms of a feature set from Hearth to build. We're constantly talking to them in real time on a platform that feels native and comfortable to them to get their honest and candid feedback. And it's really cool to see how intimate you were able to build alongside the community.

3:27It is tough initially without a product being made to actually ask for backing and funding from your community. Tell us the reasons for actually going down the crowdfunding route. I think, like you said, venture capital funding for women-led businesses is extremely difficult to obtain. In fact, it continues to decrease. Unfortunately, it's about 1.9 % of venture capital funding that goes to female-led businesses. And one of the points of pushback that we received from potential investors was around whether or not somebody would actually pay to solve this problem. We also had pushback around whether or not the problem was actually real, because as you might imagine some of the investors that we are pitching are people that couldn't fully empathize with the problem that we are trying to solve.

4:12That problem being the mental load of running a home, the fact that that process is still completely disaggregated and antiquated, as I mentioned. It's a problem that we found certain investors weren't able to fully empathize with. And because they couldn't empathize with it, they therefore had doubts that people would actually pay to solve that problem. And so in order to prove out that this is a solution that families actually wanted and needed, we knew that we had to prove that families would pay for this solution. And so we started by quite literally just showing families designs of the actual product, designs of the software features, not even a fully baked hardware prototype, not even a fully baked engineered software experience, but rather just designed Figma screens of what Hearth could be like and the potential of what it could be like.

5:04And actually before we launched a full crowdfunding campaign, which was last year, the year prior to that, we actually did a small pre-order campaign using Shopify itself and asked people to put down$50 deposits on Shopify to voice their support of the product and show that they were actually willing to pay for this solution. And so that was two years ago that we launched our first ever, what we call like our first pre-order campaign. And what's really encouraging to me is that a lot of those customers have actually stuck with us. So two years ago, we had an early adopter batch of customers that put down that$50 deposit and they patiently waited for a full year just to complete their remaining balance of their payment.

5:49They did that on our Indiegogo campaign that we ran last year where we raised$600 ,000, as you mentioned. And now they've waited another nine months to actually receive the product in homes. And they're finally now, since January, we've been shipping those units out to those families. And so I think it's just been a testament to how acute this problem is and the fact that there is not a better solution in the space, that families have actually gone through that two-year journey with us and have been patient from that initial ideation phase all the way through to product development, all the way through to it actually being in their homes.

6:24Two years is definitely a long time to wait, but I think it's a testament to the fact that you've identified the right market that has this need. So through research, we realize families and moms in particular are actually the key demographic for using hearth display, but they're a group that rarely gets talked to or appeal to through marketing campaigns. How did you actually build your marketing and crowdfunding campaign to appeal to them? I honestly love that you said that because that is one of the most gratifying parts of this journey is working with a customer that is typically overlooked.

7:04And what I mean by that is I think there's a lot of companies that try to sell things to moms. I think it's harder to find companies that are genuinely trying to solve her problems, especially when it comes to this invisible problem that is the mental load. It's something that's very hard to see. It's actually complex to understand and empathize with, but it's a problem that most parents, particularly moms, experience every single day, if not multiple times a day. And so that has actually created this very close, genuine relationship between us and our customers. Because I think when we finally showed up and started asking questions related to this problem area, parents were just grateful that somebody was actually paying attention to this problem and wanting to solve it.

7:52Is it right to assume that mothers probably aren't the typical crowdfunding participant and even campaigns aren't really speaking to them as well. Did you face any challenges in that respect? Absolutely. When we were considering a crowdfunding campaign last year, there were a lot of pros and cons of what platform we could use or how we could continue to grow our customer base at this business stage. And to your point, seven in 10 backers of crowdfunding campaigns are men. And we knew that that was going to be a hurdle for us to get over because most of the customers that purchased during our Indiegogo campaign had never participated in a crowdfunding campaign before that.

8:37It was a completely new platform for them. And so in order to make that successful, we had to actually really build trust with our customer before ever launching the crowdfunding campaign and educate them as to why we chose crowdfunding, why we chose the specific platform that we chose and why it was best for our business stage and best for them as a customer. I think building the foundation through those Facebook groups really initiated those relationships that you needed. Then how did you turn those relationships and actually start marketing to them and tell them about the campaign that's about to happen?

9:14Obviously, that community was very aware of the product that we were building because it was something that we were giving them that behind the scenes look all along the way. We were giving them sneak peeks into what features would look like. We were giving them sneak peeks into what our prototype looked like. We were sharing that iteratively with them as we were building. And so I think the crowdfunding campaign was a natural progression of that education journey with them. And we kept it very conversational in our Facebook groups, letting them know that it was an opportunity to get involved from an early stage and, of course, purchase Hearth at a very discounted rate so that they could go on that early adopter journey with us.

9:56But at the same time, it was important to us not to pressure our customers knowing that crowdfunding was probably something they had never used before. It was really important to us to say, this is how you can opt in at this stage. If you choose not to opt in, there will always be opportunities in the future for you to join us. Staying very true to that statement of building in public. So you ran some initial tests for the product. Where were some of the feedback and results you used to incorporate into the next iteration of the product? I think that research is important to do for any business, of course.

10:31Any problem that you're trying to solve, you need to validate that that problem exists. Not only that it exists, but it's a problem that people want to solve so much that they're willing to pay for the solution. So I think those pieces are critical for any business, particularly for a hardware business. It's really important to get those hardware pieces right because it's much harder to pivot and change your business on the hardware side than it is on the software side. You can make tweaks to your software weekly or biweekly and have that show up instantaneously for your users. You cannot do the same with hardware, of course, because there's such long lead times in hardware development.

11:06And that's why it was so critical for us to actually establish that baseline of research before ever moving into product development. And so to your question on unique insights that we gained, I think most interesting to us was that 70 % of the families that we surveyed still use a whiteboard in their home, even though it's 2023. And that was a core learning for us as to why in 2023 are we still using this antiquated solution that doesn't connect with Google Calendar or whatever calendar you use. It doesn't sync with any of your other systems. It doesn't even look beautiful in your home, but families are still using it.

11:43And why is that? And what we found is the reason families are still using whiteboards or chore charts or other analog tools is that they're highly visible and they provide a central place for everyone to go self-serve information to themselves in the home. And that is critical for adoption across the family, particularly in kids. Kids desire that ability to actually go somewhere, understand what their day looks like, understand what their responsibilities look like, and need that source of information to know what's expected of them in the future. And that's why the hardware component of our business is so important to us because we're providing that same visibility to all members of the family.

12:27We're just doing it in a much more efficient way. And I think a lot of our listeners would love to go through the same process where they're actually also serving thousands of potential customers. What advice do you have for that process where they're actually collecting the right data and analyzing it in a helpful way? Yeah, that's a great question. I think, practically speaking, when you're first at that idea stage, it's obviously natural to go to friends and family to have them validate that initial idea. And it's definitely a first step that's hard to avoid. However, what we found is that, of course, it was much more important to talk to our target customer.

13:09So it was really important for us to find those families that fit that target demographic that we're trying to reach, which is, again, families with two-plus kids ages 4 to 11. and we did that you know in a very scrappy way of reaching out to friends and family and asking who they knew and kind of widening that circle of influence until we were at the point where we were talking to those families who had little to no connection to us but fit that core demographic and what's interesting is for our first alpha test where we actually sent hardware to families we sent some to friends and family advisors of the business people that were very close to what we were doing internally, and then some to those users who just purely did not know us at all, but represented our core demographic.

13:56You could have hypothesized that our friends and family would actually use Hearth more consistently because they were kind of personally biased and personally invested in seeing Hearth grow. But we didn't see that at all. Even though they were invested in us as individuals growing this business, we actually saw that complete strangers who fit our target demographic used Hearth far more consistently than our friends and family group, which was really important for us to see because it was validating that we were building for the right consumer and we were building the right features that met their needs.

14:30So you did those initial tests where you send out hardware for potential customers to test. What were some of the results and feedback you used to integrate into the next round of making iterations on the product? The first test of hardware devices that we sent out to our early adopters were not the same hardware devices that we use today. It was a really scrappy approach of finding a more off-the-shelf solution that we could test quickly and iterate on quickly to see how families were using Hearth in their homes. And that group of customers is responsible for so many of the iterations that we've made on the software side today.

15:13For example, when we first launched our calendar feature with Hearth calendars, you can integrate existing calendars like Google, iCal, et cetera. You can also add calendar events natively to your Hearth display right on the touchscreen itself. You can also add events from our companion app, et cetera. So there's lots of functionality when it came to calendars, but we launched calendars with a daily view of that calendar first, and we did not include alternate views. And what we found almost immediately is that every single customer was asking for a monthly view, which when you think about it, makes a lot of sense because a whiteboard is typically a monthly view and like a broader overview of what's happening for that month.

15:57And so we immediately knew that we had to reprioritize monthly view. We always knew it was something we were going to do, but we realized we had to prioritize it much higher in our product roadmap in order to meet those needs. So that's one small example of ways that customers have helped us reprioritize that product roadmap to meet their needs more effectively. I think in those early days of your business, it's okay for your processes to be super manual. I think we're always looking for some tool to create this efficiency of getting something done quickly. But the truth is, is like, you shouldn't be getting the data done quickly at that initial phase of business.

16:37I always say, and I think a lot of growth leaders say that you do unscalable things and you earn the right to find scalable solutions. And so that was very true in those beginning days, like those initial pre-order deposits from two years ago, I probably spoke to half of those people on the phone, my co-founder probably spoke to the other half. And what I mean is we were sitting on 30-minute calls with these customers one-on-one, learning from their problems, understanding how they wanted their home to work more efficiently, figuring out how we could provide that solution, and quite literally telling people about Hearth one-on-one.

17:16And to the outside looking in, that's such an unscalable way to grow your business, especially a consumer business. You can't talk to every single one of your customers for 30 minutes on a one-on-one phone call. But I think you earn the right to be in a more scalable environment where that's no longer possible. And those early days of really digging in deep with our customers, I mean, we still know everything about our first customers. I could tell you their names, their partner's names. I could tell you how many kids they have. I could tell you the ages of their kids. We know them so well because it was so important to us to really develop genuine relationships to actually get under the hood of what that problem was and what the solution would then look like.

17:59Of course, we did large-scale surveys, of course, where it asked things like, what do you currently use to manage your home? And that's where we saw things like whiteboard be really prevalent. But it didn't provide the full validation of the pain point. They supported that. What really provided the validation of that pain point was getting on the phone with these families and having in-depth conversations and saying, run us through your days, run us through the pain points that happen all throughout that day, and then synthesizing and summarizing that information in a very manual one-on-one way.

18:33How many individuals or families you and your co-founders spoke to? Hundreds. My calendar was literally just calls with potential customers all day long for the first few months of our business. We basically set up a funnel where we, within those Facebook groups or within email nurture campaigns, would offer a Calendly link and our calendars were not our own. Our calendars were our customers to use as they needed. And parents in particular are very time poor and have very chaotic schedules, which is exactly why we're trying to help them. And so what we would see is that my Calendly link would get booked for 15 minutes from now and I would suddenly have a call with a customer in 15 minutes or it would get booked the next day and all of a sudden my afternoon would be gone.

19:21And again, in some ways you'd think, well, that's not scalable, that's not efficient, how are you using your time properly? But I would argue that especially in those early days, there's no more important way to spend your time than to be flexible with your customers and talk with them when they're willing to talk with you and learn from them directly. Now that you've gone through all the research and testing process and you're shipping out all these devices, what advice do you have for fellow founders who are in the beginning of their journey when they're thinking about researching, when they're thinking about prototyping?

19:55Going back to what we were talking about earlier, I think it's so important to validate that earliest idea that you have with your core consumer before investing in what it looks like to fully build that solution. And I think for us, getting those Figma screens in front of individuals and not just asking them to give qualitative feedback on what that looks like, but actually asking them, would you be willing to pay for this solution was really important for us to hone in on what those go-to-market features were going to look like. And I think that can be really, really scary. Two years ago, when we did that first pre-order campaign on Shopify and we were asking people to put down$50 deposits, quite honestly, we didn't know if we were ever going to be able to fulfill the product that we were putting in front of people.

20:43We weren't venture-backed at that time. We were still in that ideation phase. And of course, those deposits were fully refundable, and we protected that customer capital so that every single customer could get every single dollar back had they ever wanted it. However, it's still really scary to ask people to put down those deposits when you have no idea if you're actually going to make it to the stage where they can fulfill their remaining balance and then you can fulfill their order. It was a giant leap of faith that we had to take as a business to say, what is our risk appetite around taking in customer capital?

21:15How much customer capital are we willing to take in and then protect so that, of course, it should the worst happen if we needed to return it? We were able to do that. And that was kind of a mental model that was new for us of trusting that the next step was going to come, trusting that by doing that pre-order campaign, that was actually going to unlock the next stage of business for us. And that's exactly what happened. And when we completed that pre-order campaign, we were able to present back to investors the fact that people were willing to pay for the solution, that people did see this as a problem.

21:47And we were able to put real data behind that, and that helped us close our first institutional round of funding. Sounds like that was a very important step to have a proof point, which later helped with raising money through venture capital. That we'll get into later on in the show. I'm chatting with Susie Harrison, co-founder of Hearth Display. We've been talking about their pre-launch strategy, and I hope Shopify Masters is helpful for your launch and beyond. If you haven't already, give us a follow or subscribe, and let us know what you think of the show by leaving a review. Thanks. So we talked about how actually having customers pay that down payment was a proof point for their demand and also their reception of the product, which led to the campaign and also fundraising.

22:38Tell us about your experience raising money through venture capital. Like I mentioned earlier, there were definitely and have continued to be investors along the way who just can't empathize with the problem that we're trying to solve. And so it's been really important for us to find investors who innately understand that problem, understand our customer, and understand how big of an opportunity this is. We firmly believe that the mental load and this broader concept of what it looks like to be a caregiver, that could mean caregiving for children. It could mean caregiving for elderly parents. We firmly believe that the tools supporting caregivers are antiquated.

23:20And because of that, we deserve that a family operating system, which is how we think of Hearth, deserves to be a household name because of how big of a problem this is. And so we've always looked for investors that can very quickly align on that vision. And it's pretty clear from the first couple conversations whether or not that's something that we're having to over-educate and over-explain on to almost justify why we view the problem the way that we do and therefore view the solution the way that we do, or if we're in a conversation with an investor who actually starts dreaming with us, ideating with us, and very innately just understands the problem.

23:59And we've been very fortunate that the investors that have joined us at this early stage in our journey have just really been big believers in the problem that we're trying to solve, and they see the broader opportunity and vision for the company. I'm sure there were a lot of questions from investors when you were pitching. Perhaps some of them were questioning the fact that you actually wanted to build out hardware, which can be very expensive and a very difficult process. But why was it so important for the team to actually create hardware? Yes, the question around hardware is one we get a lot, mostly from investors.

24:36Ironically, we don't get that question from our customers. Our customers are never really asking us why hardware, which I think is what reminds us that the hardware is so important to this solution. Typically what we hear from our customers when they first hear of Hearth is, oh my gosh, this is exactly what I need. I need a highly visible place in my home that's centrally located where everyone knows that all the information in our home lives in one place. And so we're never having to justify the hardware when we're going to sell it. We only have to justify the hardware with investors because to your point, hardware is a capital intensive investment.

25:14And so there are definitely investors that shy away from wanting to invest in a hardware business. I think for us, why the hardware is so important is because we're actually trying to change consumer behavior, which is quite a hard thing to do. We are not just trying to create, as an example, a digital to-do list for mom so that her Post-it note to-do list is now digital. we're actually trying to redefine what the dynamics of a household look like when it comes to family management and household organization. And what I mean by that is the research shows that women are eight times more likely to carry the mental load of their home, regardless of whether or not they're working moms, regardless of whether or not they're the breadwinner.

26:04None of those things matter. Women still carry eight times the mental load of that of their male counterparts. And they're two times more likely to actually be doing the execution side of that work as well. And that's a really hard habit to break. You know, obviously there's cultural factors in that. There's societal factors in that. But that is still the world that we exist in today. And because of that, we found it highly critical to build something that actually takes up real estate in the home, that every single person in the home walks by every single day and is reminded of their own unique role in running a home and how they can self-serve that information independently to have more ownership in that process.

26:46You're really changing this dynamic of making things more interactive and integrated. During the time that you're making these updates to the hardware, you're also actually releasing new features through software. So how do you balance the software and hardware development at the same time? Yeah, it's a really big undertaking to be executing both on hardware product development while we're growing our feature set. I think what is important for us is to understand where our priorities are as a business. You have to, just like any business, you have to stay hyper-focused on the things that are going to move the needle the most for your customer.