{EY} FROM THE DESK OF ELAINE YANG

TO: Start-up Comp. Founder

FROM: Elaine Yang
SUBJECT: An Investigative Report on Crowdfunded Headphones
DATE: August 8, 2014

Crowdfunding is a method of raising a specific amount of monetary funds from the general public via the Internet
towards the upcoming projects and ventures of small businesses. Kickstarter is amongst one of the top grossing
crowdfunding platforms since 2009 to have raised over $1 billion from 6.8 million people for over 66,000 projects. 7 out
of 10 funding projects for headphones have garnered success through Kickstarter with the remaining 3 still ongoing.
How does it work?
With an average of 470 projects added each day, crowdfunding has become a huge staple in generating capital for small
businesses and privately held companies that struggle with monetary funds. Kickstarter is a donation-based platform that
rewards its investors with perks and goodwill after a project has been successfully funded.

The creators have total control over their projects. The different levels of pledges set by the creators will offer different
levels of rewards. If a project is successfully funded, Kickstarter will apply a processing fee of 5% to the funds collected.
Headphone projects on Kickstarter
Project Progress Goal Actual # Of backers % Of goal met
CordCruncher Headphones Funded $20,000 $66,689 1,548 333%
Rock-Hard Canadian Maple Headphones Funded $25,000 $45,340 193 181%
California Premium Leather Headphones Funded $100,000 $220,158 1,400 220%
Wireless Smart Headphones Funded $260,000 $3,390,551 15,998 1,304%
Stadium Headphones Funded $100,000 $112,824 206 112%

When funding goal is reached, the creators recieve the funds and the backers get their rewards
The creators set monetary levels for their backers to pledge
Users browse through a number of projects by category
{EY} FROM THE DESK OF ELAINE YANG

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Headphone projects on Kickstarter (cont.)
Project Process Goal Actual # Of backers % Of goal met
JAMBOO Headphones Funded $12,000 $20,994 403 175%
Decibullz Custom Molded Earphones Funded $40,000 $112,906 193 282%
FreeWavz Smart Earphones Funded $300,000 $315,680 1,506 105%
LIVV Wireless Active Headphones On-going $200,000 $23,011 134 12%
Kusky GloSync Headphones On-going $50,000 $913 24 2%
Data Analysis
Based upon the above data model crowdfunding cannot always guarantee a projects success. There are many factors
that determine the outcome of a project.
Concept and Idea
The initial idea of a project should be a solution to a problem. By identifying a problem, and designing a solution that is
solid, equals success. Backers are more likely to invest in a project if its significance can be clearly defined. People are in
support of crowdfunding, because they are drawn to a vision that they can engage with.
Marketing and Competition
A great product is one that can appeal to its audience by being on trend and not too far ahead of its time. Social media
has become a key tool for creators to market their product and build an audience before going onto Kickstarter. Having
competitors has its advantages in encouraging the next creator to re-define a product.
Funding and Goals
When setting a funding goal, its important to distinguish between expectation and hope. Before launching any campaign
onto Kickstarter creators usually invest tens and thousands of dollars into the project, keeping in mind the costs for
production and shipping. Kickstarters browser page allows people to view a projects funding percentages relative to
their initial goal. The set goal needs to be one that can be confidently reached. A project is more then likely to attract the
attention of more backers if its percentile has passed 300% during its early projection stages.
Rewards and Perks
A highlight feature to crowdfunding platforms is the ability to give back or reward backers for providing their support.
The level of rewards is dependent upon the amount of money pledged by the backer.
Feedback and Advancement
The importance of receiving feedback from the contributor community is valuable towards delivering a product that is
mainstream and affordable. Creators strongly believe that feedback can drive on product design and fixing a problem is
better then meeting requests.
{EY} FROM THE DESK OF ELAINE YANG

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Conclusion
Crowdfunding is a great way for small business and entrepreneurs to launch a product design. Crowdfunding helps to
build a respective audience of backers and supporters who believe in the same vision as the creators. A successful
crowdfunding campaign is not shaped overnight and is dependent upon the time, effort, and money invested towards
the project.
1. https://www.kickstarter.com/projects/hellobragi/the-dash-wireless-smart-in-ear-headphones
2. https://www.kickstarter.com/projects/2117596730/stadium-headphones-experiencing-sound-like-never-b
3. https://www.kickstarter.com/projects/jamboo/jamboo-headphones-stand-out-jam-out-0
4. https://www.kickstarter.com/projects/livvheadphones/livv-wireless-active-headphones
5. https://www.kickstarter.com/projects/1587181400/cordcruncher-earbud-headphones
6. https://www.kickstarter.com/projects/plpl/rock-hard-canadian-maple-headphones
7. https://www.kickstarter.com/projects/californiaheadphones/california-headphones-premium-metal-and-
leather-de
8. https://www.kickstarter.com/projects/2046570926/kuskytm-electroluminescent-glosynctm-headphones
9. https://www.kickstarter.com/projects/freewavz/freewavz-smart-earphones-with-built-in-fitness-mon
10. https://www.kickstarter.com/projects/1960846098/decibullz-easy-and-affordable-custom-molded-earpho