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From pennies to profits: Crowdfunding sites fueling innovative new brands

Outdoor start-ups are bucking traditional funding sources (banks and private equity) in favor of tapping future consumers through crowdfunding sites l

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Throughout the next month, SNEWS will recap its coverage of Outdoor Retailer Summer Market 2013 with select stories from the O.R. Daily we published at the show July 31 – Aug. 3. It’s an opportunity for you to catch up on stories you might have missed in O.R.D., and for us to update and upload the articles to our searchable archives.

Former Army brat turned outdoor entrepreneur Michael Brown has a message for industry newbies: Crowdfunding is helping small start-ups make industry inroads.

Brown quit his former career to operate his new company Alpine Hammock LLC, which produces a hammock/bivy hybrid. He raised the initial funding ($42,915) on Kickstarter, one of 50 quickly proliferating crowdfunding sites, and mailed the gear directly to his “backers.”

“Individuals like me [are] using crowdfunding to become companies that can succeed in the outdoor industry,” Brown said during the Outdoor University seminar “Using Crowdfunding to Accelerate Outdoor Innovation” on July 31 at Summer Market.

According to Brown, crowdfunding sites raised $2.7 billion in 2012, and that number is expected to double throughout 2013. The outdoor industry, however, represents just “one-twentieth of 1 percent” of this figure, Brown said. “It’s almost off the radar.”

One of the bigger challenges, Brown warned, is convincing outdoor media and public relations companies to view crowdfunding campaigns as legitimate sources of industry innovation, and then write about them. “I hope that crowdfunding grows and that the media and industry support it more,” Brown said. “Supporting innovators is a great way to get new and interesting content up on your website.”

For individuals hoping to launch a product through crowdfunding, Brown advised they spend between one and six months performing “pre-launch” preparation. The first step, Brown said, is best practices research. He cited other crowdfunding success stories, including a fast-to-inflate sleeping mat that raised almost $150,000 and a theft-resistant bike light that garnered $84,728 in support.

Other pre-launch steps include learning how to build a social media following (don’t spam); understanding costs (from Kickstarter, Amazon and taxes); creating rewards (prioritize the product and target low-dollar consumers); producing a compelling video (keep it under two minutes); and throwing a launch party (supply beer, food and make it a social media event).

The hour-long lecture clearly inspired the 25 attendees. “It’s always been who you know and what you know in order to get your product out there,” said Alyssa Forrest of in Salt Lake City, Utah. “But to have sites like this is progressive.”

Duncan Cheung, a consultant from Green Order in New York City, was struck by the potential impact of the trend on the outdoor market. “I think crowdfunding builds community and transparency, and stimulates dialogue between the maker and the user — all of which is really important in the outdoor industry.”

–Kim Thorpe