Kickstarting From China: A How To Guide
This article is by a guest contributor, Joseph Constanty, co-founder of THE UT.LAB. joe has lived, studied, and worked in Greater China for ten years, you can reach him at joe@theutlab.com.
Transforming from an OEM design and manufacturing firm to a full blown brand has become a trend in China.
For the past twenty years these firms have been the backbone to the supply chain of multinationals and distribution companies alike. But, as manufacturing hubs always flow to the lowest common denominator, Chinese firms are being forced to adapt rapidly. Powered by years of manufacturing and design experience in a truly global marketplace, we are sitting at tipping point where homegrown Chinese manufacturers begin to look beyond the borders of mainland China to launch a new brand.
This is exactly the situation that TRASENSE, a Shenzhen based company, is currently sitting in. After short deliberation, Kickstarter seemed to be the best option to launch globally with the minimum amount of resources and investment.
The U.S. version of Kickstarter is by far and away the most powerful of the dozen or so countries that are represented on the platform. Yes, projects that are from other creator approved countries like the U.K., Canada, and Australia can build outstanding campaigns, but there tends to be an added advantage for “U.S. projects”.
For the past three months I have been preparing TRASENSE for the launch of their wearables brand on Kickstarter, and we successfully launched on June 8th, and hit our funding goal only 25 hours later.
So, here are my real-time tips to create a U.S. Kickstarter Project by non-US citizens/companies:
First, we set up two companies, a Hong Kong L.L.C. and a State of Nevada LLC. The state of Nevada, like Delaware and Wyoming does not have a state business tax (you still have to pay federal taxes). In our case the HK company is the only “Managing Member” (a.k.a owner) of the Nevada company. An HK company can be set up by agents in China or HK for less than $800. The Nevada LLC can be filed online at the Nevada Secretary of State’s website, SilverFlume. This will cost you approximately $400, and you will also need a “Nevada Registered Agent” and a virtual office (these are links to the services we used, but you can just Google and find dozens of others).
Once you have completed a company registration you will then need to set up an Employer Identification Number (EIN) with the United States IRS. You can complete all the documents here, and keep in mind you will need the help of a U.S. citizen or U.S. Green Card holder to do this. Without this EIN number you will not be able to open a company bank account or finish the last steps of the Kickstarter registration page. Please make sure they do their homework on their liability for your entity (I am not a lawyer, so I cannot provide legal advice).
After getting your entities in place, you will need to set up your U.S. bank account, and an optional Hong Kong account. Many U.S. banks require that business accounts with non-U.S. citizens on them will need to go to travel to the U.S. to open the account. We have found at least one bank that does not, EASTWEST Bank. You can email me and I would be happy to provide you with our contact representative in their Hong Kong branch that assisted the opening of both the HK and Nevada accounts. Both bank accounts took approximately two weeks to setup. It will require a number of identification and proof of address documents from the directors of the company.
The above steps are what you need to legally run the Kickstarter project. Beyond the basics, a China based team will need to invest in a PR and customer support team. I am a huge fan of UpWork (formerly ODesk). For the TRASENSE project we hired two part-time customer service/social media reps, one graphic designer, and one video editor/animator to help us build our PR outreach, social media content publication schedule, and customer service support for before, during and after the thirty-day campaign. You can find quality contractors for USD $5-$10/hour. All sound effects and audio tracks were purchased on Audio Jungle.
For many of us, PR seems to be a bit of a black hole, but luckily two years ago Tim Ferris and the team at SOMA published the holy grail of how to manage PR and social media outreach for a successful Kickstarter campaign, you can still find it here. We have had to make some tweaks to the formula, but most of the techniques and tools detailed in the blog post still hold true. The biggest take away from that post is that you must approach your PR outreach like a data scientist. It’s not hard, but it takes time, homework, and diligence. You can expect at least 50 hours of media preparation prior to launch.
The finer details of the project like the video and the Kickstarter page itself is an art of storytelling. I think some of the best examples of great Kickstarter storytelling has been orchestrated by Jake Bronstein over at Flint and Tinder (KS1, KS2, KS3), and the original Pebble Kickstarter video, or more recently with The Coolest. I would like to think that the three campaigns by THE UT.LAB, and even the TRASENSE MOVEMENT project have been able to embody the basics of Kickstarter storytelling which allows the backer community to come along for the ride; starting with the spark moment, to first development, to prototypes, and right up to the Kickstarter launch.
Provided you have a great product, backers really want to know who you are and why you want to launch the project. Don’t be afraid to find a way repurpose the best elements of the above videos and project content pages for your own project. You don’t need to re-invent the wheel. Please feel free to email me if you would like a sample of how we set up our Audio/Video script for our Kickstarter videos.
And of course once you go live, be ready to answer a flood of questions, and this is where hiring one or two people on Upwork comes in handy. A project that earns more than $20,000 will require at least twenty hours of customer service and social media tender loving care every week during the campaign, and then for at least two weeks after the project closes.
This should provide a base level of knowledge to get you started. To see a live version of a China based campaign now live on Kickstarter, just click over to the TRASENSE MOVEMENT project.
Image credit: Kickstarter