You know there’s something broken about business funding mechanisms when you WANT to give money to a company and yet you can’t. I would be willing to give Google $50 to implement a feature in gmail, for example to be able to schedule and send emails in the future. I’m sure a lot of other people would be willing to give small amounts for such features as well. But Google and many other businesses haven’t found a way to tap into this type of crowd funding opportunity. It is really an amazing opportunity: not only do you get money for doing what you probably needed to do anyways without having to give out equity, but many of your customers will feel more attached and more invested in your product.
Fortunately, small businesses and entrepreneurial projects have started taking advantage of the crowd funding model. One of the most famous crowd funding platforms is Kickstarter and one of its darling success stories is Ministry of Supply. They initially aimed for $30,000 but have raised $430,000 so far! Being a big fan of entrepreneurship, I was happy to spend money to help fund this small business started by MIT students. I learned about Ministry of Supply from this Techcrunch post and decided to “invest” in them. Well it’s not really investment in the traditional sense because I get no ownership equity in their company. It’s more of a purchase. I pay money and I get an amazing product in return. But it is investment in another sense because without the collective purchases of many Kickstarter backers like me, the product may not even have been possible. So the “return on investment” is not dividends or stock value, it is the making possible of a value added in my life. And now I have become a big fan and supporter of Ministry of Supply as well. Nobody asked me or paid me to write this post, I just feel a sense of pride in them.
The product they make is amazing dress shirts with advanced space-suit fabric and design technology that makes them wrinkle-free, odour-free and anti-perspiration. In the words of Rip Empson on Techcrunch, “in essence, it’s a magic shirt.” For me, someone who often finds the need to look good, professional and business-ready, without having much time to spend worrying about what to wear and when to wash it and iron it, etc. this kind of shirt seems like exactly what I need. You can learn more about Ministry of Supply and their amazing products by visiting their website, their youtube channel, their vimeo channel, or their facebook page (which just passed 1000 likes today!). The current shirts are for men only so far, but when I asked them about women’s shirts they said they are planning to roll them out in a few months.
Now crowd funding may be a great new opportunity, but it’s not all that easy. A lot of the companies on Kickstarter miss their promised deadlines for product delivery and cause frustration. Ministry of Supply is also behind schedule, as are most technology-based businesses backed by Kickstarter investors. Furthermore, managing so many small funder relationships as opposed to a few big ones can be a hassle at best and an investor relations nightmare at worst.
In my particular case however, Ministry of Supply has impressed me with their relationship management. When I wanted to try on their shirts before deciding which size fit me, I asked if I could drop by their office on my trip to Boston for the Academy of Management 2012 annual meeting. They invited me with open arms, and in fact invited all their Kickstarter backers to visit their office at 105 South Street. When I went there, they were incredibly nice, and took time off from their busy schedule to chat with me. I especially had a pleasant conversation with Kevin Rustagi who told me little about their history and ambitions. For example, he told me that they are not a company that is “born to flip” unlike others that he knows well and that I am currently researching. We also discussed their marketing strategy a little bit and the possibility of doing an academic case study on their company. After trying on their shirts and performance layers, I got to take a picture with Kevin, Aman Advani, and Sean Coffey.
I also took a picture of their bookshelf, because you know, as Bishop Potter is quoted to have said: “people will not be better than the books they read.” So perhaps by extension, knowing about the business books that entrepreneurs read can tell you a little about how likely they can be to succeed.
A couple of weeks after my trip to Boston, I got a very nice little gift in the mail along with a thank you note. How very delightful guys, thank you Ministry of Supply!