You have a product and business proposition with a clear market and competition that still runs “Help! I’ve fallen and I can’t get up!” ads that have amused and pained viewers for decades. Those companies rake in tons with web sites that look designed for the last century. Your launch strategy seems obvious: hype your modernity and more reasonable tone. Go young. Build a customer base through a crowd-funding site like Kickstarter.
Lively, a startup with a product it says respects seniors and doesn’t shock-pitch people with warnings that old people are about to fall and die or get attacked by a masked robber, made that calculation. But with just 168 backers and $15,000 of its $100,000 goal raised over a one-month period, the campaign bombed.
Lively is still upright and kicking and officially launched on Tues., thanks in large part to strong funding status uncommon for a Kickstarter entrant. The startup has raised $4.8 million from Cambria Health Solutions and seed investor Maveron from both before and after its attempt, and its product definitely has the potential to take share from complacent incumbents like Life Alert and Life Call. But its attempt to tap the Web hive-mind was nonethless a humbling failure. The company's cofounders say the company learned tough lessons about the limits of crowd-funding appeal.
The demographics are unforgiving. Crowd-funding can work great for art projects and tech. For products less-geared to pique a twenty-something’s interest on their lunch break, not so much. CEO Iggy Fanlo admits that feedback on Lively’s on the funding campaign told Lively its pitch was out of the box from Kickstarter’s tried and true.
Lively’s products are meant to ease peace of mind and communication for both independently-living seniors and their children. Passive sensors on objects like kitchen appliances and medicine cabinets track patterns of activity to make sure a senior is ok, while family and friends are prompted to include photos and messages in a twice-monthly personalized newsletter that Lively gathers and then mails to the senior recipient.
The company is confident that such a product provides peace of mind to a senior’s adult children without offending their parent, who would also appreciate the product’s mechanisms for promoting communication beyond simply checking up that the parent is healthy.
The problem for the company is that those two related products each have a separate target market. Adult children may have found their message more compelling than Life Alert’s tacky commercials, but the company couldn’t find any seniors on a crowd-funding site. Worse, Fanlo now believes that 50-somethings also aren’t interested in putting money down up-front for products they can’t see. “Our demographic doesn’t really do pre-orders,” he says.
Use the campaign to test your message. “Most of the people who talked to us from Kickstarter were boomers and we started a dialogue with them,” says David Glickman, cofounder and COO. “They were then talking to their parents after and getting feedback. What we learned was that the adult children were saying, ‘talk to my parents directly.’”
Lively found out the hard way that its social component, the newsletter, was considered a nice idea but not the difference-maker that would convince a senior to try the product. What mattered most was to explain that this was a more palatable way to stay in your home.
“All we had to say was ‘you’ll stay longer and you’ll feel ok about it,’” Glickman says. “That’s influenced our packaging, the user manual, how we ship.”
Fanlo says that startups need to focus on the “acute pain point,” the market problem, that they can solve. The rest of it, no matter how nice it looks, won’t acquire more users.
Get noticed even if no one bites. Both cofounders say that one area where their campaign did succeed was in getting the company some publicity. FORBES held off on writing about the company, preferring to wait and see how the campaign would affect Lively’s launch. But the company did get a vote of confidence from PandoDaily, the Wall Street Journal’s VentureWire blog and others. The Kickstarter and such coverage helped the company raise several million more in funding, exposing it to investors in China, Singapore and Japan.
Lively’s product, which its founders claim is much cheaper than the old guard of alternatives as a flat fee of $149, plus a cancellable subscription to the LivelyGram newsletter service at $19.95 after two months, could yet catch on. The company’s got funding to ride out a potential slow start and says that no matter what happens it won’t “get negative and scare people” like others in the space do to drive sales.
But even at launch, its founders have learned a lesson about the limits of crowd-funding other entrepreneurs should take to heart.
“We were ‘Downton Abbey’ going in front of the ‘Iron Man’ crowd,” Fanlo says. “But we’d already done our market research with real people in the Bay Area and Florida. If a startup is doing its market research on Kickstarter, you could say that was stupid.”
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