This blog post is the first of a series where we are interviewing founders of Capdesk user companies about their entrepreneurship stories. We will cover successes, failures, strategies of business and most importantly topics around ownership and investor relations. In this blog post we spoke to Capdesk user Primo Toys (Solid Labs Ltd.) about scaling a business through crowdfunding, administrating a startup with 340 shareholders, their current Kickstarter campaign and upcoming Series A.
Hi Filippo, congratulations on your Kickstarter success. 3rd campaign, raising $781,823 from 3373 backers. That’s impressive. What is the key to become successful on Kickstarter?
Thank you very much. I believe this still makes us the most crowdfunded ed-tech project in Kickstarter’s history, with a combined $2,342,946 from more than 10,500 backers spanning more than 100 countries, which is a small achievement, but a nice one to claim. We have always been admirers of Kickstarter and embraced the platform as a way to launch product across all stages of development.
The reason for our success is that we have a strategy for every campaign. We prepare meticulously, structuring marketing efforts, controlling spend and preparing deliveries. We think of Kickstarter as the most open and transparent way a business can connect with it’s audience while launching a new product, and this is now part of our DNA.
Throughout each campaign the feedback and engagement from our community has been humbling, with some press moments in outlets such as The New York Times, TIME Magazine, the BBC, and Forbes. Our small success did not come overnight though. I suppose it started with our first campaign back in 2013.
Back then, all we were after was £35,000 to develop a handful of prototypes, and we achieved that with a very honest campaign, making our product look exactly as it was – a raw box full of wires. We Never tried to communicate something we were not. We ended up raising £56.000, which is not a lot compared to our later campaigns, but enough to develop and deliver our early prototypes and build a small community.
Fast forward to July 2017, and we’re now a multimillion dollar educational toy company, with office in London, Japan, and Korea. Manufacturing facilities in China, and distribution centres across the globe. We’re still a very small company in the grand scheme of things, and there’s a lot of work to be done, but we’re definitely on the right track.
You also raised funds through equity crowdfunding? Have you experienced any synergies between Kickstarter and the equity raise?
Toward the end of 2015 is when demand grew. As opposed to tens and hundreds, orders began to arrive in the thousands, but all products were still made by hand, in the office, a what was then a four people team. We badly needed to invest in scaling operations, so we decided to raise some money on Crowdcube.
In January 2016, we successfully raised £275,000 from 300+ investors. It was definitely another great community moment, and a testament to crowdfunding as an industry in and of itself. Some Kickstarter backers becoming Crowdcube investors, and some Crowdcube investors later became Kickstarter backers during the biggest campaign we had.
How has it been to run a company with +300 shareholders?
It’s challenging at times. Communication can be difficult and fragmented as you can imagine, but we’ve been lucky with our investors. I have a great relationship with a handful of our major investors, and the ones with which i don’t are silent and let us get on with work. Investor support and trust is key, but in the end, investors are not the priority in a business, and good investors understand this.
As a company, we’ve received investment to build a business, which means that our duty is first and foremost to our customers. We’re here to provide amazing products and services to children and parents. Second comes the team. We are 17 people working from our London office alone, and growing in size. They’re the ones making it all happen, and it’s our job to look after them. The human component is so important. FInally, getting 1 and 2 right, means we make our investors wealthy. Our ambition over time is to become the best educational toy company in the world.
Back to the practical side of managing 300+ investors, it is impossible to have a personal connection to each and every one of them. We were frustrated by our inability to communicate at scaled post Crowdcube, and that’s how we came across Capdesk. We were looking at different solutions including Mailchimp for example, but none provided the core features that made management of hundreds of shareholders simultaneous and easy. Standardised communication through Capdesk has been very useful.
Thank you Filippo. We are very happy to have you on board. What is next for Primo Toys?
We’re a profitable business, trading in over 100 countries. In 2015 we went from turning over $100k to $4.5m in 2016. We’re growing organically, and we’re doing work that matters with a product that is loved the world over. We live in a connected world, surrounded by computing power, and very few people knowing how to create with it.
We’d like to stay in our early learning niche, but it’s definitely time to work on a new product. We started Primo Toys as a means to build the sort of products that can prepare children for the world of tomorrow as opposed to the world of yesterday. Cubetto sales are still growing, and will keep growing over the next 2 years. We’ve only scratched the surface of our addressable market, but it’s definitely time for a new product, and a new challenge though. Coding is only a small part of the equation. Expect some big announcements this fall!
Are you intrigued? Check out Primo Toys' latest Kickstarter campaign!