Is Crowdfunding the Right Move for Established Brands?

Is Crowdfunding the Right Move for Established Brands?

the ridge wallet

On this podcast, you’ll learn from Daniel Kane, an entrepreneur who successfully raised nearly $400,000 through crowdfunding and why he thinks established brands should not use crowdfunding.

Daniel is the creator of The Ridge Wallet, a slim, RFID-blocking minimal wallet he launched on Kickstarter.

In this episode, you'll learn:

  • How they used Kickstarter to come up with their own product idea.
  • How they A/B test their Facebook ads.
  • When to use Facebook ads and when to use Instagram ads.

Listen to Shopify Masters below…

Show notes:

Transcription

Felix:  Today I'm joined by Daniel Kane from RidgeWallet.com. Ridge Wallet sells slim, RFID blocking minimalist wallets. They were started in 2013 and based out of Los Angeles, California. Welcome, Daniel.

Daniel: Thanks Felix.

Felix: Tell us a little bit more about your story. What is the most popular product that you sell?

Daniel: Yeah. Our main product, we try to keep it pretty streamline, is just a front pocket RFID blocking wallet. We stick with the same design across the product line. Basically they come in different material choices and colors. We started it back on Kickstarter in 2013 and had a really good campaign and spun that off into a stand alone e-commerce business on Shopify.

Felix: Very cool. What is your background? How did you get involved into creating products, launching with Kickstarter and e-commerce? Have you done entrepreneurial things in the past?

Daniel: Yeah. I was back in college when we ran the Kickstarters. I've always been interested in entrepreneurship and just starting businesses and random stuff here and there back in high school and earlier in college. Just kept building on that and I always enjoyed how things worked and business in general. Something eventually just stuck.

Felix: I'm looking at the wallets now. Anyone else listening out there definitely check it out. Most wallets I see are fabric or leather. This is not those things. They're actually pretty hard looking, I'm not sure a good, better way to describe it. Solid pieces of wallets. How did you know that there was a market for this style of wallet?

Daniel: At the time there were similar things on the market and me and my dad were actually ... The idea came about because we had actually contributed to another Kickstarter and I thought it was the Ridge. Then, when we looked at it a little closer, it ended up being just, basically just a piece of elastic. Comparing what was available and what we wanted, we definitely thought there was room to improve that general basis. We knew that people wanted a design like that, but I just didn't quite like anything available. We had to set a criteria and we went about just designing the product around that.

Felix: I like that. You had bought or backed a Kickstarter campaign previously thinking that there was a product out there already that met your needs or what you wanted. You got the product and it didn't meet your needs so you decided to create it yourself. What was, I guess, the first step? You said you had a list of criteria first before you dove into this. Can you tell us a little bit about what those criteria were and then how did you come up with the criteria and the features that you wanted in your version of the wallet?

Daniel: Yeah, sure. There are a lot of minimalist wallets out there. Most of them revolve around ... There's two different types of designs. The first design is basically just two plates with an elastic band around it. Just one tension spot on either side. I didn't really like that how it could come apart, what if the elastic slides off? Your cards could go flying. I wanted an extra retention band that was also included within the design. Something I couldn't just ... Be simply pulled apart or get snagged on something and break into pieces. That was the first design criteria, which I wanted 3 retention bands, so the elastic, if you look at the wallet, is on the sides and the bottom, keeping the elastic in, or keeping the cards in. We also wanted it to be modular so you can replace parts as you go. If you want to add a money clip or take away a money clip or personalize it over time, you'll have that option of buying replacement parts. That was basically the main one was just modular, RFID and coming up with a one-piece design, something that seemed a little more complete. I don't know. A lot of the wallets I saw just they didn't seem like something you'd actually want to carry around. I wanted something that was more of a one-piece design.

Felix: That makes sense. This RFID blocking technology that comes in your tagline and you mentioned a couple times and is on your Kickstarter page, how did you know that this was something that you should target? When I have purchased wallets in the past or shopped around for it, I haven't been in the market for a long time for wallets, but it's not something that crosses my mind initially to release ... If I were to release a product, to emphasize RFID blocking aspect of it. How did you know that that was a feature that you should put front and center with your product?

Daniel: RFID's something I heard about before. I know the Myth Buster's guys had tried to run a segment RFID and how prevalent skimmers were in the industry, which is like people being able to wirelessly grab all your credit card info from contact cards. Yeah, it was also inherently just if you have a wallet made out of aluminum, it's just going to have RFID blocking capabilities. The initial design to me, that was a byproduct, so it happened to be RFID blocking. That is something that I have in my personal life, talked about and asked about before. It's just a nice added benefit that you don't have to worry about it.

Felix: Yeah, that makes sense. Let's say you had decided that this was a product that you wanted to create. You guys figured out the criteria and features that you wanted to include in it. What was the first step? Was it just to launch a Kickstarter campaign or did you have to do further research before you got to that step?

Daniel: Yeah, we pretty much just went straight to the Kickstarter. I had a male manufacturer in the US that I had worked with in the past back in high school. I was prototyping some drums. I had a guy close to my hometown that I had worked with in the past who could do some prototypes. Once we come up with the idea and we had something tangible, we did some grinds and we had a little ... I actually made something out of some credit cards, cut them up, glued them together, something to show the guy. He made the first couple samples out of aluminum and stainless steel. That was nice to get the first iteration kicked off. We were able to send that over to a manufacturing partner I had in China that they built on the design and improved it. That was pretty easy to have something physical made here and then send it over there to be improved on.

Felix: You had a prototype that you made locally first and then it made it easier to work with the manufacturers overseas in China because you already had something physical to show them for them to take a look at. What did you want to get out of them? A quote? Again, this was prior to launching on Kickstarter, right? You were just doing some extra research?

Daniel: Yeah, but I also wanted to find a manufacturer before I made any promises on Kickstarter. My current manufacturer we're working with today was the one who made the first prototype for Kickstarter. He's been awesome. We've kept working with him over the years. He's been really good to help improve the deign. Initially sending it over there was ... We couldn't really find anyone to ... Unless you were really looking to spend a lot of money, which we didn't have at the time, to get some serious prototypes done in the US, would have been really, really expensive. We got some crude prototypes done, whereas like the basic shape and layout. It was all the basic C and C work. Then in China, they took that deign and improved it and polished it up and got us some good samples we could work with.

Felix: You already had some samples, initially, before launching on Kickstarter? I'm trying to get an idea of how much preparation, based on your experience, how much preparation should a Kickstarter campaign creator do, especially for a physical product, prior to launching their campaign.

Daniel: Yeah. A lot of Kickstarter campaigns tend to fall behind schedule. It's a pretty common theme in all the projects. Stuff just takes longer than you expect. That's why I decided I think it's good to have at least the physical samples. You need to be able to show pictures and the video and stuff like that. Beyond that, I preferred to have the manufacturing partner set up before launching the Kickstarter. Some people like to do that afterwards. I wanted to really make sure the campaign went smoothly and I knew I could get it made somewhere.

Felix: I think that's a great idea to have everything ready to go, hit the ground running once you do have a successful campaign. Let's talk a little bit about the Kickstarter campaign. I'm looking right now at your Kickstarter profile and the Ridge Wallet was not your first Kickstarter campaign, is that correct?

Daniel: Yeah.

Felix: Talk to us a little bit about your experience, your initial experience, launching a Kickstarter. I see here the Enclave Eyewear. Tell us a little bit about this one.

Daniel: Enclave was actually ... Started a sunglass company before the Ridge. That was maybe 6 months before, something I had always been interested in. It was another side project of mine, which is the sunglasses industry and how it's really regulated by exotic, top dogs just control everything. I thought there was good market to go in there and just the old high quality product at affordable price. It really resonated with people and that campaign did really well. I think we raised 180,000 dollars, which completely blew me away. I was hoping to raise 5, 10,000 dollars, maybe get a little sunglass business going. That ended up doing really well. We spun that off into ... That was my first e-commerce project. About 6 months later, my dad and I had the idea for this wallet and we were like, "Yeah, we should get going on designing a better version of this."

Felix: Yeah. To get the actual numbers here, Enclave Eyewear Kickstarter campaign had a goal of 9,700 dollars. Ended up raising 182,000 dollars from over 3,600 backers. Definitely blew away your goal, like you said. Maybe we'll start here. You've launched the Enclave Eyewear, the original Ridge Wallet Kickstarter campaign and the Ridge Wallet 2.0, all successfully funded, we can go into details about the amount raised and everything in a second, but when you first approached your initial Kickstarter campaign, how do you know how much you should be raising? How do you calculate that figure into your funding goal?

Daniel: The initial figures for me were really just based on the minimum amount I needed to place an order with that manufacturer. Otherwise, they have minimums for basically everything. The sunglasses, it's essentially 1,000 pairs per color, I think was our original manufacturer's minimum quantities. You'd basically be able to place an order with them and get access to better pricing you need to be able to place a larger order. Most of those goals were just based on the minimums that I would need to actually get something going.

Felix: Makes sense. You said that Enclave Eyewear successfully launched, it was your first e-commerce business that you launched. 6 months later you decide to start the Ridge, essentially, with a new Kickstarter campaign. What was going on at the time with Enclave Eyewear? How were you able to balance that and also prep for a totally different product, a new brand, I'm assuming you have different manufacturers. How were you able to balance the two?

Daniel: Yeah. It was actually a lot of work. That was during my senior year of college, too. The Enclave campaign was the summer of going into my senior year. Then the Ridge campaign was about halfway through my senior year of college. That was a pretty busy year for me. It was just a lot of time management, just making sure that I allotted ... Getting up at a certain time, making sure you get your school work done and still having a social life. Really just about making sure I got in there. I had a coffee shop I'd go to over at the library on campus and I'd just dedicate some time to getting some work done on the campaigns. Also, once it got to be a little too much between school and the campaign, I had one of my really good friends from back home start taking over a lot of the emails. He's actually the one who works ... It's both of us working on it every day today. He's been brought on as full-time over the years.

Felix: Very cool. Enclave Eyewear, was the campaign already completed and did you already fulfill all the orders and was an e-commerce shop going already? How much was in motion by the time ... I'm trying to get an idea. Someone that launched a business and maybe they have a day job, or they're working part-time, it's already enough going on, how much did you have going on with Enclave? Was it already humming by then? I can't imagine that you can do that much in 6 months. Maybe you're a superstar and you were able to establish things by then. How much of your business was set up and going by the time you decide to launch the Ridge?

Daniel: Yeah. I'm looking at our campaign updates right here. Pretty much I had the Enclave campaign, I had it all timed out where all the sunglasses were going to be delivered during winter break. That was our time to shine. It was get done with school for the quarter, get back home, all the sunglasses were there. Had my family, my friends, we just got a system going and we got everything shipped over those 2 weeks. During that time, I already had the Ridge campaign ready to go. There's a lot of down time in running the Kickstarters. Once you've completed the campaign and you finalized everyone's color selections and whatever you need to get from them, whatever info and their shipping info, then you have the production start. Then you have a couple months of not really anything you can do. Stuff out of your control. Waiting for the stuff to be delivered was really the time when I was working on having the Ridge campaign prepped. Once the sunglasses arrived, we worked really hard on getting everything shipped. Once that was all completed, by the end of December, we got all the sunglasses shipped and then it was late January, early February, we started the Ridge.

Felix: Very cool. When you were preparing for the Ridge launch, and I'll talk about the details now, it was a 12,000 goal. Ended up raising 267,000 dollars from 5,305 backers. Definitely another awesome, successfully funded campaign. Was it easier to launch a successful Kickstarter the second time around? Were you able to use any of the customers from Enclave Eyewear, or was it pretty much a brand new start?

Daniel: Yeah. It definitely helped and I had some insight into the process. When we started the first Enclave campaign, I didn't know what was possible on Kickstarter. It completely blew me away. I don't know. Was not expecting to get that kind of support. Going into the Ridge, I knew what was possible and it was a product people wanted, so we did send out an update to all of our sunglass backers. It's a different product, so there's not a huge amount of overlap, but that definitely did help get the campaign going at first.

Felix: Makes sense. When you launched this campaign, and maybe we can talk about Enclave Eyewear's success too, but particularly with the Ridge, how did you market that? How did you promote the campaign to blow past your goal so easily?

Daniel: The Kickstarter success really had a lot to do with just Kickstarter's organic popularity. I don't know how it's set up now. I actually haven't really been on Kickstarter a lot over the last 6 months to a year, but at the time they would take the projects that were new and getting a lot of traffic and a lot of organic reach by just people browsing the site and that would get put up into the popular list. That's when you really start to see it kick off. You're either featured on the home page, or you're on the popular list when people go to just browse projects. We were lucky enough to get a lot of backers early that liked our products that pushed us into that popular crowd.

Felix: Makes sense. When you determined the goal of 12,000 here for the Ridge, was it also just based on the minimum order cost for the initial run?

Daniel: Yeah, pretty much.

Felix: Makes sense. Cool. Once the campaign ended for the Ridge, what next? The funding is complete. You have the funds. What are you focused on in the first, let's say week, after Kickstarter campaign is successfully funded and ends?

Daniel: After the Kickstarter was funded and ended, it's basically time to start gathering info from your backers about their selection so you can get manufacturing underway. We had more or less the versions and the colors people wanted, but you still need to get a little more info. We'd send them out a survey and they would give us their shipping address and their final selection as far as color and money clip, or no money clip. Once you get all that info gathered, you can start putting together your order, or the quantity you need to order.

Felix: Cool. When this campaign was running, though, you mentioned that the key to your success was being featured by Kickstarter. That was the case back then. I'm not aware and I guess you might not be aware either, of how it works today. During the campaigning time, did you promote it at any point, or did you just rely on that organic boost from Kickstarter's promotion?

Daniel: We didn't do any ads, any traditional ads, like Facebook, Google or anything like that. We did email a lot of bloggers and tried a couple various outlets. I don't know how successful those really were. It was tough to gauge at the time. Most of it really was just from Kickstarter's internal system.

Felix: What was the pitch like when you emailed these bloggers and publications? Did you wait until you broke your goal? This idea I've heard about how PR in publications and bloggers tend not to care so much about campaigns that are not successfully funded yet, but will pay a lot more attention to the successfully funded ones, almost regardless of the funding goal. Did you experience this at any point?

Daniel: Yeah, definitely. I do think it's more of an issue now, just as Kickstarter's become just more campaigns over time, become a little more saturated, almost. Yeah, we definitely did have some people that just weren't interested or wouldn't really respond much. It's a tricky one. It really just depends on the product and who you're trying to reach and what stage of the campaign you're at. It is really difficult getting it off the ground. Who knows how many campaigns they are being contacted about they're like ... I don't know if they're not successful yet, I guess there is less of a story, for a lot of bloggers and stuff, it that's really what they're looking for. Unless you have some really unique product.

Felix: Yeah, that's the feeling that I ... That's what I've heard as well. What are some things that learned? Let me go over the last campaign, actually, before I ask this question. You launched 3 total. We talked about Enclave already, Enclave Eyewear. We talked about the Ridge, which is the original. Then the Ridge Wallet 2.0, which had a 14,000 dollar goal. Ended up raising 127,000 dollars from over 1,500 backers. Again, another successfully funded campaign. During this entire process, you've successfully funded 3 out of 3 campaigns. What are some things that you learned about maybe the campaign setup, the way you communicate with the backers, that you got better at, or maybe focused more on, over time as you launched the 1st, 2nd and then the 3rd campaign?

Daniel: Transparency, I think, helped me the most with the backers. No matter what there's going to be setbacks. I would say probably ... I'm throwing this out there. I'd say maybe 75 percent of Kickstarter projects that are successfully funded fall behind over a year. Backers start to get upset if you don't hit your promised date. There's so many issues. You can't possibly foresee everything. That was the main thing was just being really transparent with our backers. They seemed to be really understanding when there's a hiccup or a little bit of a delay. Most of our stuff went pretty smooth. That was the main thing was just really being honest and updating your backers. They just want to hear updates. They want to feel like they're part of the process. As a project creator, you definitely should be able to deliver that.

Felix: Transparency, I think I heard this as well before from other Kickstarter campaign creators that, when things do fall behind, and they inevitably do fall behind it seems, transparency is the key to making sure they don't revolt against you. How do you do this? Is it just through the Kickstarter updates or you send them emails? What is the method of contacting them? How frequently were you doing this?

Daniel: During the project it was definitely campaign updates. It wouldn't be super frequently, it would just be whenever there was something good to say, or bad. Any time there was a big update, either production was on time or something fell behind or if I had updated timelines. I would just send a new update out and just tell people, "Hey, look. This is what's going on." Just thank them for being understanding and a part of the process. People are really receptive to that. They like having the insight, which is why a lot of people are also backing these Kickstarters, is just to get some insight into the process and see how it goes.

Felix: Makes sense. What about the actual setup of the campaign itself? Were there specific videos or images that you found worked better and then you decided to definitely include them in the 2nd or 3rd Kickstarter campaign you ran?

Daniel: Yeah. I had a friend from school who's a really good photographer and videographer. He helped put together the videos. He filmed them, edited them and had some input on what angles he thought would work well. I've always just tried to show the product as well as possible, just how it works, so people can just get a feel from the picture exactly what it does. That's been the most important thing for the Ridge, actually, is just showing through pictures exactly what our product is and what it does without having too much description.

Felix: That makes sense. Does video work even better for that, or do you usually stick with using pictures? Like you're saying, the wallet seems pretty straightforward, but you have a ... Not a complicated wallet, but you have a wallet that definitely has features in it that might not be clear just through looking at it very quickly. Did you focus a lot on creating videos to demonstrate the product as well?

Daniel: The Ridge, actually, is mostly photos right now. Just to show what the wallet does, on our homepage, or a side angle with the credit cards and the cash on the top. That seems to resonate really well with people and have been our best performing ad photos are those same ones. That people can just see a picture and get a snapshot of exactly what it does, or what it's supposed to do. People are pretty intuitive. Once they get it in their hands, they fiddle around with it a bit and they learn how to use it pretty quickly.

Felix: You mentioned earlier that you haven't gone on Kickstarter much. It looks like the last campaign was in 2014. Would you launch on Kickstarter today, if you had another product idea or product launch coming up? Would you consider going back to Kickstarter to fund it?

Daniel: It depends what it is. With our current product line I wouldn't, just because I don't believe in using Kickstarter as, I don't know, another advertising revenue or something. I think it really should be used for people looking to start a fresh idea from scratch. I feel like we're off the ground and running a bit. I don't want to abuse the platform and I also want to keep our own standalone e-commerce brand. I prefer Shopify since we transitioned out of Kickstarter.

Felix: You wouldn't consider, if you had another product line coming out, would you consider crowdfunding or pre-selling it, maybe not through Kickstarter but just through your e-commerce site or just through several other crowdfunding launch yourself? Would you do that or are you moving away from the idea of crowdfunding new product lines?

Daniel: I think we're moving away from idea crowdfunding, unless it was something totally separate from the wallet to the sunglasses. I would consider it, but we made a decision awhile back that we don't want to run anymore campaigns for the wallets.

Felix: Interesting. Can you elaborate on that? Why not? The reason why I'm asking is because I've seen other companies that have success and definitely the cash flows and a lot of money to invest, but they always go back to Kickstarter or some kind of ... Maybe not Indiegogo so much, but definitely go back to Kickstarter from new product lines, maybe specifically for the reason that you mentioned which is, as a marketing channel, to get awareness quickly. You said you made you, as a team, as a company, made the decision not to go that route. Can you give us maybe your thoughts on that? I haven't heard this conversation come up about when should established brands go back to Kickstarter?

Daniel: Yeah. I guess it's just a personal preference. I feel like if we went back to Kickstarter at this point with the wallets, it would just feel a little cheap, or we might get a little flack from people just for like, "Why are you doing this? You don't need to do this anymore. You've raised your capital and now you should go and transition to more of a traditional business." I feel like that. It's a bit of preserving the platform for what I believe it's meant to be and just the fact that I would prefer to build the brand, the Ridge, as a brand instead of a crowdfunding product. I would like it to be its own product that stands on its own merit. I think the growth potential and long-term goal is a lot better reached just on your own website.

Felix: Yeah. I see what you mean. You want to build up an asset that you own, essentially, and have more control over rather than ... The other thing I'm struggling to come up with the terminology as well. You don't want to water down the brand by always associating it with crowdfunding or Kickstarter campaigns. You want it to be established as a brand of its own. I definitely see where you're coming from for that. Speaking of your store, how did you drive the buzz from Kickstarter over to your own Shopify store?

Daniel: We just rolled it over. We put a little link in the top of the campaign when it ended. We began taking pre-orders, so we made our original site on Shopify, which was an awesome platform to start with. One of my friends from school recommended it to us. We just sent out an email like, "Hey, we're not really taking anymore orders from the campaign, but you can still place a pre-order on our website and those will be fulfilled after the Kickstarter pledges are fulfilled." We had a little notice on the website saying ... Everything was available for pre-order, but there was a little asterisk like, yeah. All the Kickstarter pledges will be fulfilled first. Yeah, that was a great way to make the transition from Kickstarter to Shopify.

Felix: You had a link going to your store, but then on the site you were still taking pre-orders. You were almost extending, not the crowdfunding so much, but you're at least extending the buzz and actually converting those into some sales. How were you able to estimate when those would come out? Like you were saying, you wanted to focus first on fulfilling the orders from the original backers, but now you're also taking pre-orders. I could imagine it getting pretty hectic because now you have to manage almost two different releases, essentially, right? Now you have two groups of people that are waiting for products. Was that a challenge?

Daniel: Yeah. Definitely was a challenge. We had a little bit experience with the Enclave campaign with running a similar system of accepting some pre-orders after. It is really difficult deciding how many you can accept, when the stuff will be in. The good thing was, since the campaigns did so well, we basically used all the money from the campaigns to order extra product. We had more product than we needed. That was the transition to stand alone e-commerce business, so we were able to order more inventory with that money we'd raised. That was what we were pre-ordering. We had an idea of what quantities we were getting in. All the product would get here at the same time, but then we work on fulfilling the Kickstarters first. It wasn't too much of an overlap on the pre-orders, but it definitely was difficult projecting timelines and estimates and all that.

Felix: Makes sense. Cool. Now on your Shopify site, it's been a couple years now since the Kickstarter campaign, so I'm assuming not most of the buzz, but the traffic that comes to your site, is not so much from Kickstarter anymore. What has been the most successful marketing channel for you guys to drive traffic to your site?

Daniel: We are pretty far past the Kickstarter days. We don't really get a whole lot of reference. It's really cool. We get emails from people, "Yeah, I still have my original Kickstarter wallet," or something like that. The majority of the traffic is just past that now. The main platforms we use are Facebook and Google, with Facebook and Instagram being our primary traffic driver. It's been awesome. I really like their ad platform.

Felix: Very cool. You use Instagram ads as well?

Daniel: Yeah.

Felix: Awesome. Let's talk about this then. You use Facebook ads, Google ads and Instagram ads. Out of those three, which one, if you had to pick one, which one would you focus on the most, especially for selling the kind of products that you're selling?

Daniel: It's a tricky question. It depends what you want to accomplish. Just from a pure return and best performance metric, Facebook is definitely our best performer. If I had to choose one, it might be Instagram. I think that's where you can still drive organic growth the best, because you still have your reach with all your followers. That's what we're going to be focusing on moving forward is really upping our Instagram presence. It does cost ... Instagram's a little more expensive than Facebook, in our experience, for displaying ads, just because it's a newer platform and probably a little more sought after. If it's for pure metric, Facebook, but from a branding standpoint, I prefer Instagram.

Felix: Okay. You said that it depends on your goal. Is what you mean, with Facebook ads, it's almost like lower funnel? You're trying to drive someone to click on the ad and to go to the product page and actually complete a purchase. With Instagram, you're just trying to get a brand exposed, or get people to be aware of the Ridge wallet. It would be great if they do, but the main goal is not to get the sale immediately. Is that what you mean when you say it depends on what your goal is?

Daniel: Yeah. I think Instagram's a little friendlier towards organic growth and just branding, because people are more likely to see your profile. Facebook, you barely get any organic reach anymore on your posts. The ads are one thing and they're great and they're really effective, but that doesn't translate into a lot of people looking at our profile and being more loyal followers or checking us out more often. Whereas Instagram funnels into those ads create followers as well as sales. Those followers are really valuable because as we're posting pictures on Instagram, we're able to interact with them a lot more.

Felix: I see. Instagram has been better for you guys to actually grow, let's say, your following on there, which then essentially means free advertising to them when you post pictures on your Instagram profile. You don't have to pay for them to see it.

Daniel: Yeah, exactly.

Felix: Cool. Makes sense. What about Google? What has your experience been like? You're using AdWords?

Daniel: Yes. We're using Google AdWords. We haven't ventured too much in display on campaigns. We run a little but of display campaigns which are pretty effective, but they're not quite as effective as Facebook and Instagram for us. That's where we focus most of our ad spend right now. The key words are going really well with Google. We hit like metal wallet, aluminium wallet, Ridge wallet, RFID blocking wallet, stuff like that, where people are searching for a product like this really helps.

Felix: What's your strategy then for, let's say, particularly with ... Let's start with Facebook, then. For Facebook ads, how do you know what copy to use or what kind of pictures to show? I guess we'll start there. How do you know what the ad should actually look like?

Daniel: It's really a lot of just AB testing. We found that we have a couple taglines that don't make too much of a difference depending on what the ad copy is, but what really makes a difference is just the picture. That makes it or breaks it. We've had a couple pictures that just performed really, really well. Facebook has their internal thing where you can put in for a single ad up to 5 different pictures. It'll rotate them first and just find the most effective one for your target audience and then shift all the funds to that. That is what we use. We'll get a bunch of different photos, put them in and just see what performs the best and move forward with that one.

Felix: What is the testing cycle like? You launch a Facebook ad, you put in the 5 different images just so that Facebook can rotate through them. How often are you checking these to choose a winner for that particular AB test?

Daniel: Not too often. We have actually two main photos we're using right now. We don't stray too far from that. At first, it was every couple weeks we'd do it, but it's been ... I haven't even tested these photos in a couple months. I'm just confident that these are the best ones we have right now. Maybe every 3, 4 months I'll get a new photo shoot done and just spot check them and make sure these still are performing the best.

Felix: Very cool. In terms of the targeting aspect of it, how do you determine how to target the ads?

Daniel: We do a pretty broad target compared to what a lot of feedback I've heard. Even from talking to our account manager at Facebook and stuff. We do a pretty broad targeting. That's just been more effective for us, so I'm not sure if that has to do with just the product in general has a wider appeal, is what I would guess. Our targeting is really broad. We just do males, females, age maybe 20 to 50. We put in a few interests, depending on maybe shopping, fashion, technology, is probably usually our main target audience. That broad net tends to do really well. Then we have the Facebook pixel which tracks everything on the website, conversions, clicks and stuff. It'll track who's been to our website and then we can re-target to those people to get more of a interested audience.

Felix: Yeah. Re-targeting is definitely a must-do, essentially. You're just getting such great ROI for showing ads to people that are already interested, or know about your product. What about Instagram? I'm not familiar with launching ads through there. Is the technology, not the technology, but are the targeting features and the AB testing features available through there as well? What can you do, I guess, to refine your campaign, when you launch an ad campaign, through Instagram?

Daniel: Yeah. The Instagram ad network is pretty new. They only started accepting that last year. They started showing some ads. They just switched to an algorithm based news feed. That will help target ads a little bit better and make sure it's not flooded or, I don't know. It's actually the same dashboard as the Facebook little ad panel there. It's just another little checkbox you can choose, Instagram or not do Instagram. I like to have separate ads dedicated to Instagram and Facebook. You can have them all in one, where one ad will just display on Facebook or Instagram, whatever is more effective. I prefer to keep them separate so you can monitor how well they're doing compared to each other.

Felix: Do you find that the different ads perform differently between Instagram and Facebook? Are you focusing more on a specific style of ads when you are in Instagram versus Facebook?

Daniel: No. They're pretty similar, the ads we've been running. It translates pretty well to what's effective on Facebook will also be effective on Instagram. I haven't noticed too much of a difference where it actually affects what I write or what picture we use. Yeah, Facebook's definitely a little ... Has been a little more effective. If you put the ads together, it'll show it all to Facebook. It'll show that as more effective. That's why I split up the Instagram ads, so I have a dedicated Instagram ad so I know those are being delivered on Instagram.

Felix: You can look at the metrics separately as well?

Daniel: Yeah. Instagram doesn't have a conversion pixel set up yet, so it'll be mainly based on clicks. Whereas Facebook, you have the option to optimize for clicks or conversions. They should be adding that soon.

Felix: I've seen Instagram ads before and I really like the way that it's done, too, because I don't even recognize that it's an ad immediately when I see it. It looks just like content and a lot of ads are done very well. I've definitely clicked on, I don't think I've made a purchase yet, but I've definitely clicked on different ads I've seen on Instagram. Based on what I've seen as a consumer, when I'm scrolling through my feed there's a picture and then sometimes a video. Do you go between the two? Do you try video out with the Instagram ads?

Daniel: We haven't done any video yet. We probably will this year, start testing out. We've got to get some videos done that are friendly for ads. No, we haven't tested any of that out yet. It's just the static images.

Felix: Then there's also a call to action available for the ad itself. I think usually what I've seen is just learn more ... Can you customize that kind of stuff too, the call to action?

Daniel: Yeah. They have a couple options. There's learn more, shop now is the one we basically use, because it's for product.

Felix: Then clicking on it will take you to ... Will basically, I think, use an Instagram web browser and take you to where, I guess, to your product page? Where do you usually drive the traffic?

Daniel: Yeah. We just have them click the home page for most of those ads.

Felix: Cool. Are you able to track that as well? I know there's always a difficult issue of tracking users, or tracking prospective customers, between their mobile device and their desktop. I've found, well not I've found, but I've heard from a lot of entrepreneurs that people will browse there, or do a lot of shopping, not shopping, but browsing at least, through their phone. Then the conversion happens on a desktop. Have you found that to be the case as well with your experience selling, especially through Instagram ads?

Daniel: That's tough to say. I don't really know. You trust that Facebook does a good job at grabbing all those conversions and making sure they're accurately reported. At the end of the day, you don't really know. I take comfort in the fact that if anything, the ad's just more effective than it seems in the reporting function. Yeah, you don't know how many people are seeing an ad on their phone and then, "Oh cool. That's kind of cool." They remember the name and go look for it later on their laptop or computer at home. That conversion is pretty tough to measure, but at least you can know that you're getting at least what they're reporting, or if not, the ads doing better.

Felix: Probably more. Yeah, that makes sense. Cool. Let's talk a little bit about running the store itself. I think maybe before the recording, you were talking about all the people that were involved. At least you started this with your ... Was it your dad at the time? Who was involved in the ... You had a friend that got involved. Who's on the Ridge Wallet team at this point?

Daniel: The Ridge, it started with me and my dad and one of my really good friends from home. He started working with us and helping us do everything and ended up working with us full-time. Now he's just a full-on partner. Me and him work on the day to day Ridge Wallet stuff. My dad helps a lot more of the back end, tallying, financial stuff. We also started last year with a fulfillment company, which has been amazing. The day to day stuff, the ads, the front end, the wholesale, is me and my friend, Austin. Then we have a company that does our fulfillment. They have been fantastic. They get all the product just shipped straight to their warehouses. They inventory it. They ship for us. They handle returns. We have a couple reps with them who also help with the initial customer service, so they'll handle the initial emails and alert us to how we want something handled, or if there's someone they don't know how to deal with and they forward that to us.

Felix: Very cool. Can you tell us a little bit more about this service? What other services do you rely on to help you run the business?

Daniel: We've decided to keep the team pretty small. It was something we had to make a big decision within the company, like, "All right, do we want to grow this out and have a big team? Or do we want to keep it small and nimble?" We decided on the latter. This company's really helped that process because they can really just take the brunt of the work and they handle it really well.

Felix: Are there any other apps or tools that you rely on to help run the business?

Daniel: Yeah. We have a lot of software subscriptions we use.

Felix: Tell us all. I think the listeners love hearing about what tools that you're using.

Daniel: Let me think what we got. Our Shopify integrates with ShipStation. Then our fulfillment company has their own platform that integrates with ShipStation, called One, that they're building out in-house. Then we have Yappo, does all of our reviews, which has been awesome. It's all our reviews on the site.

Felix: Yeah. I've seen the thing. I saw that you had over 300 reviews, I think that's an amazing number to reach. Was it mostly through the automated emails that come with Yappo?

Daniel: Yeah. Yappo will email people. We have a specified date. About 25 days after purchase, so they get a couple of weeks using the wallet. Yeah, it was asking for a review. A lot of people are just happy to review that. That's where most of ours come from, just emails after an order. Then we use Quickbooks for our accounting. We have this app that I installed last year, Pipemonk, which actually syncs all of our Shopify data to Quickbooks, which has been unbelievable. It helps with all the refunds, discounts, income, sales tax and does the payment processing fees. We use 460, if you see on the site, we have a little [inaudible 00:46:24] Instagram that we had recently that I really liked. It takes all your Instagram photos and makes a feed on your website. You can link it to the product. Whatever product is in that specific Instagram photo, people can click on it and go shop it from your website.

Felix: That's cool. It also gives you social proof with the products. The customers are shopping and see other people using your wallet, or posting pictures on Instagram about it. Is that what you use it for?

Daniel: Yeah, basically. Anyone who has a cool photo that we re-posted or whatever, they'll be able to see it in action, or see what it looks like a little better.

Felix: Nice. Anything else?

Daniel: For communication, we use Slack and Freshdesk. Freshdesk is our ticketing system, where emails and Facebook messages get sent there, so when we close tickets, that really helps. Slack is just internal messaging between our team. We have all the people over at our fulfillment company on here, as well as me and Austin and my dad, so we can all communicate and stay on the same page. Other than that, we use MailChimp, Google Drive all the time. That's most of it.

Felix: Cool. Awesome. What's in store for the remainder of this year? Any product launches that you guys are working on? What's the focus for 2016?

Daniel: The focus right now is really finalizing the design. That's been a tricky transition that Austin and I have always had, too. There's product people and marketing people. I've always been a product person, where I just enjoy improving the product and always fixating on what could be better about it. At some point, you have to be satisfied with it and then switch over [inaudible 00:48:10] side. That's been our big push for this year is really finalizing the design. There's a couple last tweaks that I wanted to make. Then I think I'm pretty happy with it now. The big thing ...

Felix: [crosstalk 00:48:22] This is for a new product line or a new product?

Daniel: No. It's just improving the existing wallet design. We've decided, yeah, we're going to just stick with this same design and just make a few improvements. The main improvements are just upgrading the money clip and rounding out a few corners, making them not quite as sharp and just fixing the aesthetics a little bit. That'll be really nice. It can have a finalized, finalized design, Then we can start working on some new colors or materials and really just making sure we have enough inventory in stock has been the big issue over the last 6 months or so.

Felix: Cool. Awesome. Thanks so much, Daniel. RidgeWallet.com is the website. That's R-i-d-g-e-w-a-l-l-e-t.com. Anywhere else you recommend the listeners check out if they want to follow along with what you are up to?

Daniel: Yeah, you guys feel free. Daniel@RidgeWallet.com is my email address. If you guys got any questions, feel free to shoot that over. Sign up for the newsletter. We usually talk about new products and stuff, but that would be more of like if you're specifically interested in our product, not just entrepreneurship in general.

Felix: Cool. Awesome. Thanks so much, Daniel.

Daniel: Yeah, of course, Felix. Thanks, man. I appreciate it.

Felix: Thanks for listening to Shopify Masters, the e-commerce marketing podcast for ambitious entrepreneurs. To start your store today, visit Shopify.com for a free 14 day trial.

 


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shopify-author Felix Thea

About The Author

Felix Thea is the host of the Shopify Masters podcast, the ecommerce marketing podcast for ambitious entrepreneurs, and founder of TrafficAndSales.com where you can get actionable tips to grow your store’s traffic and sales.

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