When Spark Devices CEO Zach Supalla launched the company’s first Kickstarter crowdfunding round in November, the campaign failed. Fundraising fell $120,000 short of the startup’s $250,000 goal.
About five months later — with a new, simpler product — the Minneapolis-based company began a second round of fundraising, lowering its goal to $10,000.
On Saturday, Spark Devices closed their campaign with $567,968 from more than 5,500 backers.
The original product concept, Spark Socket, consisted of a light-bulb socket that would allow any standard lighting device to join a Wi-Fi network.
Production of the sockets was too expensive, Supalla said, due to high up-front costs and power certifications. The high costs forced the startup to set a high, ultimately unreachable goal. The failure caused Supalla and his team to take a step back and rethink their product and purpose.
“We thought to ourselves, ‘How do we deliver this same experience in a way that isn’t so expensive?' ” Supalla said.
The four-person team launched an entirely new product and Kickstarter campaign on May 2: The Spark Core.
This small, Arduino-compatible and Wi-Fi-enabled board allows engineers or hobby inventors to connect any object to the Internet. It also uses Open Source hardware, meaning anyone can access and extend upon the design.
Not only is this product much simpler, with a broader application, it is much cheaper to make, Supalla said. Unlike the Spark Socket, there are no complex power issues or high costs to purchase plastic. They were able to set a low goal, which they knew they would hit. The campaign raised $50,000 in its first day.
Spark’s success in fundraising and product development came after a four-month accelerator program in Shenzhen, China — where the company conducted an additional round of fundraising. The team worked with mentors in technology and business to create a cost-effective product they could build by hand.
Thanks to their success in funding, the company will manufacture 10,000 Spark Core units from Shenzhen and will begin shipping the devices to backers on September 16.
“It’s a great way to just get in front of people,” Supalla said. “If they say 'no,' it’s not the end of the world. You can go back to the drawing board and try again.”
Spark adjusted its campaign message after its failed fundraising round. The team made a new video and cut it down by 45 seconds, improving full-length views by 20 percent.
Looking back, Supalla said he learned that it is OK to fail on Kickstarter. It brought valuable publicity and forced the company to create a better, more cost-effective product.
“The biggest advice I would give is to start small,” Supalla said. “For a startup there are a million constraints. It makes a lot more sense to work within those constraints than to ignore them.”