We were sitting in a funky little fondue place in San Francisco talking about crowdfunding and the whole food startup ecosystem. We discussed the gap existing between early startups needing money and them being VC ready. Sure, I thought, crowdfunding helps, but it doesn’t replace the need for angel investment or an early seed round.
That’s when it happened. Cheryl caused me to pivot my thinking. She encouraged me not to think of it as only crowdfunding but also as crowdmarketing. It was a true aha moment.
I left with a new view of crowdfunding. Not only can you raise needed funds, you’re able to validate product-market fit and learn if your targeted consumers truly understand your value proposition. You can also use the visibility to create a buzz around your product and develop brand evangelists. And, it pays for itself with the funds raised. It’s a very cool concept.
I wanted to explore this further and invited Cheryl to join me for an interview. I find the idea of crowdmarketing very interesting. Getting early feedback and traction can be so vital for a young brand. Could this be a platform for making that happen?
Elliot: You position PieShell not only as a source of crowdfunding but as a platform for crowdmarketing. Can you share a little bit more about that?
Cheryl: “Absolutely. Calling it crowdfunding almost does it a disservice in that people only look at it as a source of funds. Yes, that’s vital. But, to be able to do it successfully, a company must really focus their message, build out their brand, understand clearly their audience, get in front of them, and then connect with them in a meaningful way. We help them do just that and isn’t that marketing?”
Elliot: What do you tell food entrepreneurs about the PieShell platform?
Cheryl: “We want them to understand the benefits. I had a conversation that illustrates what I try to share perfectly. When I was at TechCrunch Disrupt two weeks ago, there was a gentleman who came to me and said ‘I've had startups before and have raised a million dollars. Raising money isn't a problem. But, people are telling me I should do equity crowdfunding and I don't really understand why.’ I looked at him and I said ‘Well, you just raised a million dollars. How many investors did that involve?’ He said ‘seven,’ and very politely I said, ‘Congratulations, seven people now know about you.’ That is the ultimate difference between funding using angels, venture capitalists or family friends, and crowdfunding. Not only can you raise significant money with crowdfunding, but the crowd is going to know about you.”
Elliot: When they come to PieShell, what are these entrepreneurs missing or lacking?
Cheryl: “One of the biggest things that we see is that they aren’t pre-marketing themselves. They must tell people what they are doing and need to start reaching out emailing, sharing it on their social channels, putting a splash on their website, and collecting new subscribers.”
“On the other platforms, 75% of the food category fails at reaching their goal. I think they're worried about falling short. But we tell them all the time, you can’t just show up. You’ve got to do the work. You need to believe in what you do. Too many people are reluctant to ask for money or help. So, they're nervous to do so. One of the things we let them know is that they're not begging.”
Elliot: How does an entrepreneur know they are ready for you?
Cheryl: “It's not that there's a right or a wrong time. It's that you are ready to do what's required. One of the big misconceptions people have is they're too early or too late. There is no perfect time. A lot of people crowdfund when they're very new. They're trying to get some funds and to get some buzz for their company, and they are at a concept stage. We had a wonderful company do that called Blue Barn Kitchen. They were 100% concept stage. They wanted the money for formulas and recipes. If you are very transparent and you tell people and you let them know exactly what stage you're in, then you can come in that early.”
Elliot: What’s been your biggest challenge?
Cheryl: “Helping people understand how we're different from some of the other big players. There is a perception of how reward-based crowdfunding works. It is stereotypically thought of as presale and focused on the shiny new object. Sure, super cool innovative products do very, very well on PieShell. We just had a kelp jerky. They are innovative and a lot of people wanted to try it. Therefore, it got a lot of traction. But, at the core of all the projects and companies that come to us is people. It’s all about people.”
Elliot: What else can you share about crowdfunding and crowdmarketing?
Cheryl: “In crowdfunding, understand and accept it as a personal journey. I crowdfunded to start PieShell. I used GoFundMe. I asked for $10,000 and was fortunate enough to raise $13,000, but it was the hardest money I ever made. I didn't know what I was doing. That is why we make sure people do know what they're doing at PieShell. We don't want them to do it all alone. It was, however, the most rewarding money I have ever made in my life, and the one thing that I failed to realize was that people would live vicariously through me. I had friends who reached out to me, I am still humbled just thinking about it. They said I was an inspiration because I was bold enough to share what I was doing, and that my boldness gave them confidence that they could start their companies. When you reach out to friends and family, you will have people that support you and you will have people that do not. You're going to have to accept that your Christmas card or Hanukkah list might get a little shorter in some places, but it will also grow in others, and understand this is going to be very personal but pretty cool.”