01: Funded Today’s Origin Story
This episode presents how Funded Today started, how its co-founders Zach Smith & Thomas Alvord have now helped to raise over $200,000,000 and counting in just the last four years, and some takeaways for how you can apply the lessons they learned to your own business ventures.
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1. Persistent experimentation-and-learning (despite failure) is a key to entrepreneurial success.
2. It’s good to try to offer customers what you can do better than anyone else (or few others).
3. If you provide a sufficiently-good service, then your clients will help market it for free; relatedly, you can judge that you have a good business idea when you don’t need to pay to market it.
4. Don’t market blindly (if possible) but collect data, analyze it, and base your decisions upon it.
5. Spend as much money as possible as long as it remains profitable to do so.
6. Start lean while you focus on providing a good product/service before bothering with peripheral things like business cards.
7. Growth always requires time, so don’t expect to become a massive company “overnight.”
[00:35] Funded Today has helped raise over $200,000,000 during its first four years, coming to employ over 50 people who provide a variety of professional creative and marketing and consulting services, primarily to crowdfunding campaigners.
[02:24] Zach gets into crowdfunding serendipitously in mid-2014 helping RooSport raise money for their magnetic sports pocket.
[03:58] Thomas teaches Zach about social-media advertising and saves him from a bad pricing structure.
[08:32] Thomas presents his own backstory about graduating from law school, trying-and-failing at starting business ventures, pivoting into social-media advertising, and taking a huge risk to advertise a second Kickstarter campaign—with BIG rewards.
[14:19] Growing word-of-mouth marketing fuels popular demand for Zach’s & Thomas’ services, which eventually influences them to co-found Funded Today by the end of 2014.
[17:05] Funded Today thrived because it did what nobody else could do well (yet), but it didn’t become massive immediately.
[18:38] Zach and Thomas explain that rewards-based crowdfunding is superior to all other fundraising methods in how it enables entrepreneurs to either validate their products/services or else fail quickly and then pivot.
[22:13] Zach teaches that it’s good to experiment with different business ideas and refuse to get discouraged by failure, while Thomas explains that you can know that you have a good business idea when you don’t even need to market it.
[23:33] Zach and Thomas explain how it’s important to start lean—to focus upon the essentials of providing a good product/service before expanding to peripheral things like business cards.
[25:09] Zach and Thomas present this episode’s Projects of the Week.
Zach Smith: (00:00) Welcome to the Premiere Episode of the Funded Today Podcast. On today’s episode we’re going to go over how Funded Today started, how my business partner I with very little experienced, have now helped to raise over $200 million and counting in just the last four years and some takeaways for how you can apply the lessons we learned to your own business ventures.
Announcer: (00:18) The Funded Today Podcast is hosted by World-Renowned Entrepreneurs and Business Experts Thomas Alvord and Zach Smith. To get help with your next big business idea or to take your business to the next level go to fundedtoday.com.
Zach Smith: (00:33) Well, I’m excited to be here my name is Zach Smith.
Thomas Alvord: (00:36) And this is Thomas Alvord and together we co-founded Funded Today four years ago, and in that time we’ve generated over $200 million for Crowdfunding Campaigns on Kickstarter and Indiegogo. We also run marketing on Amazon and on people’s websites. We do video designing and we’ve created an agency of over 50 people now and we all were work remotely and in the process we’ve actually learned a lot of techniques and skills we’ve never really shared this information besides some blogposts here and there, and so we’re hoping to share some of those lessons that we learned and some of those techniques and strategies that you can use for your own business, for your own ventures, and how we got started is kind of a unique history, a unique story we weren’t even planning on starting Funded Today, but it kind of all started with Zach.
Zach Smith: (01:31) Can you believe it’s already been four years Thomas man I still remember when it was you and me, and I was running a consulting practice and you were kind of doing some political advertising and we’d kind of just go back and forth on Skype. One thing led to another and we just chatted for I mean it was at least a year or two before we even started to do any sort of business together wasn’t it Thomas?
Thomas Alvord: (01:53) Yeah I think it literally was just kind of going back and forth and that first time you reached out to me on Skype kind of doing some networking which you were good at and have always been good at and anyhow we kind of just met, I think we had met up maybe once in Salt Lake.
Zach Smith: (02:07) Yes it was for your sister Tiffany Alvord the YouTube Star we were going to do a little consulting and help with her if I remember.
Thomas Alvord: (02:13) Oh that’s right yes, yes, so really we had only met up really one time and our conversations had just been digital or virtual over Skype.
Zach Smith: (02:22) And then I got into Crowdfunding kind of haphazardly I had a consulting practice and I had some pretty good clients. One of my clients had invented a product that has now become world famous it was called the “RooSport”, they were looking to get some funding, at the time I had never heard of “Rewards-based crowdfunding” which is Kickstarter and Indiegogo predominantly. And they came to me and they said hey, I know you charge on retainer, I know you charge by the hour and I know that you don’t necessarily want to work for free but what if we give you a percentage of all the money that we raise and you do a Crowdfunding Campaign for us on Kickstarter for this “RooSport” product. And at that time I was in a pretty decent position financially so I said alright let’s go for it and after a couple months we designed their page, we made their video, and then we launched and that is where Thomas comes back in the picture, for first several days we did pretty good we raised thousands of dollars, but then we reached that plateau that for those of you who know about Crowdfunding you probably know what I’m talking about. It kind of just stop raising the money that you raised the first days from all of your pre-launch efforts and once all your friends and family get involved, and I’d done everything I knew as a consultant, I had built a pretty large email list, I had messaged all those people I had all kinds of friends and family lined up to back and pledge for this “RooSport”, but I thought there was more, and I’m sure glad I reached back out to Thomas because the rest kind of became history.
Thomas Alvord: (03:55) Yes, so you reached out to me and you were trying to find anything and everything you could do to market your campaign on Kickstarter. And there was a service that did Facebook Marketing and you reached out to me and you said Hey does this look like a good deal, does this look like a good service, and it basically was pay us $500 we’ll run targeted ads, $750 we’ll run more targeted ads, and a $1,000 and we’ll run the most targeted ads, and I looked at it and I said yes this looks incredibly stupid. First off, you should always start with your most targeted audience and see how that converts, if that converts as a positive ROI then you go broader, and then broader and broader but you always start the most targeted as possible, and then I also say this doesn’t make sense either why would you spend just $1,000 if it works well, why not spend $10,000 or $100,000, and if it doesn’t work well why would you keep spending money if you know it’s not working out. And so, I just said sure I’ll give this a try or maybe you ask hey do you or run some stuff, and back then tracking was really hard, so I threw some ads up, ran some traffic and the campaign spiked up and was doing $5,000 or $7,000 or $10,000 a day and well like hey is this for my efforts.
Zach Smith: (05:22) And I come from the world of Affiliate Marketing so I’m used to people kind of taking credit where maybe they shouldn’t be taking credit or how did this happen or where’s all these pledges coming from suddenly and quite frankly because as Thomas mentioned back in the day Kickstarter tracking wasn’t very good they didn’t even have Google Analytics you had to invent your own ways of tracking things, and in this point in time Thomas hadn’t even done that, and so suddenly we see these pledges start to spike and it’s doing $7,000 bucks a day or something when it had been doing very, very little, and I’m asking what’s going on I’m wondered if Thomas is doing something crazy and my clients Earl and Brenda are starting to wonder well this is great but what’s he doing is our project going to get in trouble or how does this all raise the money because we don’t know that he’s running some marketing on Facebook using some paid media so we decide hey let’s shut everything off and see what happens, and Thomas gives a little bit more detail into what he’s doing and we shut everything off I don’t know we paused it for maybe a day or two or something Thomas?
Thomas Alvord: (06:24) Yes and then we saw oh look everything died down I guess it was from our efforts so then we turned it back on and then for the remaining ten days or two weeks or however long it was and the another campaign raised over $100,000.
Zach Smith: (06:36) $115,000 this was huge. Suddenly a lot of people were having a look and this couple probably in their late 50’s maybe 60’s suddenly raised $115,000 for this “Attachable Magnetic Running Pocket”. A lot of people started knocking down the door, but the door they were knocking down didn’t exist it was just me and Thomas and we didn’t have any advertisements or anything.
Thomas Alvord: (07:01) When that campaign was over I said okay here’s what you owe me because you kind of just hired me directly to work on that and I said okay it sounds good, talk to you later and I was going to go back to working with my political campaigns and.
Zach Smith: (07:14) And I went back and I was doing consulting.
Thomas Alvord: (07:16) Yes and literally there was no plan to start a business and then that’s when the “FreeWavz Campaign” on Kickstarter they reached out to Brenda and Earl, and they said hey what did you guys do at the end of your campaign, you guys ended with a bang, you guys raised so much money right at the end, you did great and they said our campaign was the opposite we’ve raised $170,000 but our campaign is dead now. And with “Kickstarter” it’s all or nothing funding meaning you have to hit your goal or you don’t get the money and they had a goal.
Zach Smith: (07:50) So, they needed a $130,000 more they’ve raised $170 grand which is massive but they needed $130,000 more to get to $300,000, and like Thomas mentioned we have this thing called the “Spike At The End’ and the “Spike At The End” is when all of our marking efforts combine together to form a massive amount of raise in the last week or few days of a campaign. The FreeWavz team saw this and they wanted it, and they reached out to the only person they know Mike Lynn, and I didn’t necessarily know everything Thomas was doing at the time, I only knew what I did for all the pre-launch side of things and all of the upfront type of marketing, and so I went to Thomas and said hey here’s a client they need to raise $300 grand, they’ve already raised $170 grand what do you want to do?
Thomas Alvord: (08:36) This backstory is kind of really interesting, I mean it really does illustrate like the risk-return in a business, because at this point I’m going to give a little bit of backstory about myself so you can see the situation in the quandary I was in. Basically, they said hey we want you to run marketing for the “FreeWavz” this was the creator of “FreeWavz” but you got to cover the ad spend and we needed to raise $130,000, so let’s go back about four years. So this was 2014 that this is happening summer of 2014 about four years prior I had graduated from Law School AT Brigham Young University in Utah. I had taken the Bar I was a member of the Utah Bar, I kind of dabbled practicing some law here and there but while I was in Law School I actually saw my brothers they had a company and they were running a “Google AdWords” and day-in day-out they were making money, they were making money when they were sleeping and I was like dude this is crazy I want to get in on some of this I want to learn how to do this I started learning “Google AdWords” and I started learning marketing and I had a couple of different business ventures probably three or four or five that I started I had tried launching some other products and those had failed. I had tried launching an online petition platform and I had failed, here I was with a law degree and literally just the summer before I had gone out and done summer sales selling DirecTV even though I had a law degree right because I was trying to have a venture that would take off something that would work and I just kept pushing and pushing and pushing and nothing was working and my wife at that point we had a boy a two year old and my wife was kind of upset like dude just go get a law job like this is ridiculous right we don’t even have money to pay rent and to buy groceries, but I’m like no I know we can do this like let’s just keep going, and so at that time things had actually just started to pick up and I had a client, I was working on a “US Senate Campaign” doing email lead generation and it was going really well except for the fact that the client had like a $60,000 outstanding invoice, and I had like $40,000 in credit card debt that I had actually borrowed my dad’s business credit card because I didn’t have the money to put on the “Facebook Ad Account” and so I’m like whoa this campaign - not “RooSport” this Campaign “FreeWavz” they want us to front the money and all of the risk to raise them $130,000, and right now I have $60,000 that I’m trying to get but $40,000 in credit card debt, on my dad’s credit card and I was like man if I go for this and it fails like it’s going to hurt really bad right, I don’t really have the ability to do this.
Zach Smith: (11:28) Juxtapose that against my situation I was pretty successful I had a pretty good consulting business and I’m about the most conservative person you’d ever meet at this time, in terms of taking financial risk, and the client was technically my client and I go to Thomas and I say look man that’s $130,000 risk and at this point Thomas had run a few tests, he had kind of shown that the data was there that we could potentially make it happen, by the way there’s only about five days left in this campaign. So not only they need to raise $130,000 there’s only five days left to get to that $130,000 to get to the $300,000 goal. And I basically tell Thomas, hey that’s cool your tests worked, we’ve only ever done this one time with the “RooSport” I don’t think that’s statistically significant how about you give me a finder’s fee for sending to the client, and I’ll let you rock and roll and figure out what you want to do. I don’t even know Thomas’s backstory that he just told you then at the time, I didn’t know where he was at or anything I just thought this is crazy, he’s going to take his dad’s credit card and see what he can do to make this campaign succeed and I walked away at that point in time and I just decided to follow along and that’s not a pretty good idea but.
Thomas Alvord: (12:40) Yes I ran the tests and at that point the client’s like hey go for it, we know you can do it and the data looked promising, but I didn’t know and they’re like no come on we know you can do it and I was like yeah easy for you to say.
Zach Smith: (12:53) And again the tracking was not good back then like, like we said you didn’t, you didn’t know what your stuff was doing, you couldn’t break everything down by ad segment like you can now, you couldn’t track everything granularly, it was just is it raising money or is it not raising money and where’s it coming from who knows. In fact there was only was it 15 or 20 or 25 total sources that would even show up on top of the Kickstarter Dashboard, Kickstarter has its little dashboard on the back of it there’s only a few sources that even show up as where all your pledges are coming from and a lot of times that would only account for 30%-40% of the total money raised.
Thomas Alvord: (13:28) Yes so you would actually have to run traffic and track for $5,000 in pledges from one referral source before you’d even see if you were getting results from that marketing effort. But anyways it was difficult and the client is like hey just go for it, we know you can do it because I had told him hey I’m going to have to pass and I’m like no go for it we know you can do it. So it’s like yes easy for you to say right because the risk is all on me, but I conceded I guess and I said okay let’s go for it. And so we ran the marketing, putting all the money on my dad’s credit card again for this as well and five days later we had raised over about $150,000 more and what do they end up at $320,000 or.
Zach Smith: (14:08) Yes I mean it was, it was well over the $300,000 goal that they needed, it was exactly $325,208.
Thomas Alvord: (14:17) Okay, and then at that point we’re kind of like hey it looks like we might be on to something like I think we might have something but even then like my primary focus was still the political stuff, it was like hey that was a nice gig but then little by little we had more people who started reaching out to us saying hey! Could you help us here or hey can you help us here, and so from there it just started slowly growing and at that point I was thinking wait do I partner with Zach, like I don’t really need Zach, I’m the one who knows the marketing and Zach he is just kind of one doing the sales for the operations and we ended up obviously partnering and now for the last four years.
Zach Smith: (14:59) Well the story gets even a little bit crazier I don’t know how much backstory we want to do but one day I wake up and Thomas and I are talking daily at this point in time because we have so much interest coming in because of the “RooSport” story a lot of people starting to look at that one the “FreeWavz” story, lots of people from Utah are suddenly hearing about us. Again the word of mouth kind of thing spread like crazy. So I wake up one day and Thomas unbeknownst to me he is like hey Zach, have a look at this and he starts sharing his screen with me on Skype and he’s got a website called Funded Today, and it’s like a learning page that I think he built with “Lead Pages” or something, again “Lean Startup” that is a takeaway for you, everything we did was very lean to start and he says hey look at this and he had some ad copy on there, he had some images, he had some stuff showing the spikes at the end and I was like Funded Today, and it wasn’t fundedtoday.com, it was funded.today and back then I was still a big fan of dot-com you know, you thought that mattered for SEO and all that kind of thing I was like Funded Today why? What the heck? And I was like what are you doing this for why we go in the website what’s going on, are we like started a business together because like we both kind of thought well we both have our ways of making money and doing business, we didn’t necessarily think that we were going to start a business together. As crazy as it sounds, but it kind of wore on me and I mean the name of this podcast is Funded Today so that shows how well the name ended up wearing on me. And it just made sense, and I thought that’s great, that’s good and Thomas took the lead, created the website and from there traffic was crazy, suddenly we were getting all kinds of inbound submissions, all kinds of people wanting us. In fact, because it was just Thomas and me we couldn’t keep up with the amount of people wanting to hire us and we were just joking about this earlier today because people - still Funded Today are talking about operations in different things like man we’ve come a long way in four years because we’ve used to not been able to respond to a lot of the people that needed our help and that we would have actually been able to raise a lot of money for, and essentially from that point forward Funded Today was born.
Thomas Alvord: (17:02) And what’s interesting is once we started going it was gradual right? We weren’t doing a million dollars in revenue from month one but 12 months in we were doing that. And I think part of what I’ve learned is looking at stuff is you can’t expect to be a massive company in a day or in a week. And some of the biggest companies if you look at them they’ve been around for like 100 years right. Now granted we took off and within three years we’re doing over $10 million in revenue.
Zach Smith: (17:39) There’s something to be said about that too Thomas just from like a business perspective when you can do something that very few people can do and at that time pretty much we were the only people in the world doing this and that’s why the demand was so high. You can also charge a lot more and I think that’s where you need to look for opportunities as an entrepreneur and as a business person what do you know that nobody else in the world knows or that very few people in the world knows? Where are you an expert? Where can you charge those premium prices and get premium results that nobody else can get and that is what Thomas and I found gradually and slowly like he said we didn’t suddenly start a business after the “RooSport” or even after “FreeWavz”, but we saw the demand, we saw the need and we noticed that nobody else was able to do what Thomas and I had discovered, and it led to remarkably fast growth and a remarkably lucrative company in a very short period of time. And I think that’s why we are so passionate about Crowdfunding Rewards-Based Crowdfunding is so much better than “Angel Investing” or “Venture Capital” or “Equity Crowdfunding” which is new; or ICO’s which are “Initial Coin Offerings” which is even newer and here’s why. Rewards-Based Crowdfunding is so much better in my opinion and the reason why I’m so passion about this particular form of Crowdfunding versus all the other ways of raising money is for a few reasons. Number one validation, this is really the only type of way that you don’t have to have the rich father-in-law or the rich uncle or the rich family or come from money or have a savings account to put forth an idea and then have normal people like me and Thomas and millions of others across the world pledge money for that idea in exchange for that product in the future. If I have an idea for a new wallet to make the example easy and I want to charge $50 for that wallet and I need $10,000 to bring that wallet to life, to make my first “Minimum Order Quantity” MOQ is what they call it. Then I can create a little video put together some ad copy, launch my product on Kickstarter and charge $50 and try to convince hundreds of people to give me $50 essentially as a pre-order for my product. With “Angel Investing” you don’t get that, you convince them you have a good idea and then they give you the $10,000 and they take equity in your company. With ICO same thing you create coins and then the coins create value for the company. With “Shark Tank” they like your idea and then they take equity in your company and they give you cash. This is the only form of Crowdfunding that validates whether you have a good idea or not by going directly to the customer. They call them backers and the backers vote with their wallets on which ideas are good and which ideas are bad, and then you can take the good ideas and start businesses with them and then you can pivot or completely disband the bad ideas, in the quickest way ever imaginable and I think that’s what makes me so excited about Crowdfunding and the future opportunities within Crowdfunding, and that’s why we’re doing a podcast because we think people like you can learn what we’ve learned even faster than we learned it’s only been four years and create amazing businesses and learn from both the mistakes and the triumphs of Thomas and myself so that you can get your new ideas Funded Today as well.
Thomas Alvord: (21:18) Well and it’s not just what we’ve learned but also the lessons we’ve learned across thousands and thousands of campaigns that we worked with and different products.
Zach Smith: (21:26) Very true.
Thomas Alvord: (21:26) And business ideas. And a caveat to what Zach said Rewards-Based Crowdfunding without doubt is the superior way to bring forth a new venture that’s a product. Now if you have something that say a service or a restaurant right or something that’s localized and Crowdfunding, Rewards-Based Crowdfunding is not going to be your best bet because people are putting in money in exchange to get a product back right or I mean it could be a service but we need to be like a digital service. So in those cases it’s not as applicable but a lot of the business principles that we’ve learned and that we’ll be discussing obviously are applicable. And another principle that we’ve learned is that you know you have a good business idea when people come knocking on your door and you immediately are making money without even trying, for me that’s one of the best principles as I’m looking at investing in other businesses or starting other businesses that we might be doing together is out of the gate is there a demand for it that you’re not even advertising the service and people are knocking on your door, and that’s why people have hit us up for “Ecommerce Marketing” and for “Video Design” and for “Amazon Marketing” and for other forms of marketing and creative services.
Zach Smith: (22:58) And it’s not easy like Thomas’s backstory shows look at all the things he tried before he found this particular avenue, I think that’s what you have to do, you have to continue to test out new things, try new things and eventually you’ll see the demand for the idea that ultimately trumps all of the other ideas that you’ve had, and it’s all about staying lean and being quick and being able to listen to the customer feedback and the feedback from others as you go about this entrepreneurial journey.
Thomas Alvord: (23:32) And in terms of being lean we recently applied and this will actually be coming out shortly Funded Today our agency is in the “Inc. 5000” for the first time because this was the first year we could apply. But as we were going through the numbers what struck me and Zach and we kind of just chuckled because we really do believe in lean start-up mentality is we had generated over $100,000 in revenue and we had not spent more than $1,000 excluding our ad spend right, of course you have your ad spend but outside of our ad spend we literally hadn’t even spent more than $1,000.
Zach Smith: (24:13) And Tom and I look at businesses every day where they come to us we’ve invested in these businesses ourselves and they’ve got $5,000 for an office, and $280 for printing, and $500 for business cards and all these other things to make it seem like they’re playing business the whole entrepreneur kind of thing, and really what we’ve learned through raising hundreds of millions of dollars and becoming multi-millionaires ourselves is that even the best ideas can be run as lean as possible and should be run as lean as possible because you can always add that bulk in that substance once you’ve validated there’s that word again whether an idea makes sense to pursue full-time as a business or not and you can do that as lean and as efficient as possible. So something really fun that we have thought of that we wanted to do for our podcast and there is no special name yet so vote in the comments section or send us an email or something if you come up with a creative name for this but for now we’re calling it the “Funded Today Product or Idea of The Week” and Thomas and I will always each pick one for every podcast episode and the one I’m picking is “B&B PURE” they’re customizable headphones that adjust to you they are really, really awesome the creators are from Basel Switzerland, the campaign has already raised over $600,000 there’s only 14 days left hopefully this will still be live by the time this podcast episode comes live, but if not I’m sure you can pick them up on Indiegogo InDemand on an Ecommerce or Amazon website in the future. But these headphones are so great for just a few reasons, number one they’re customizable headphones they adjust your hearing the rewards are really good, you can get them for an extremely good price saving over $100 and everybody hears a little differently, these are the first headphones that actually adapt to everybody’s unique style of hearing. You’re going to have to watch the video, you’re going to have to read the page, but I think you’re going to find that out of all the headphones we’ve ever run we talked about “FreeWavz” on the podcast earlier today these might be the coolest ones you’ve ever seen, so go check them out we’ll provide a link in the podcast and on the website so that you can check them out as well. But my pick of the week is “B&B PURE” customizable headphones.
Thomas Alvord: (26:33) My campaign of the week is the “Nireeka Smart eBike” that’s on Indiegogo right now, and what I like about it is it has an Assist Mode that’s based on your heart rate, so depending on how fast you’re going and where your heartbeat is it will either assist you more or less so you can maintain the same heartbeat, so it’s a pretty cool smart bike you can check it out on Indiegogo right now and that’s the “Nireeka Smart Bike.
Zach Smith: (27:02) So that’s our show where as you can tell we are very excited about teaching you the ins and outs of getting Funded Today. We’ll start with “Rewards-Based Crowdfunding” and who knows where the future will take us.
Announcer: (27:12)Funded Today is the worldwide leader in Rewards-Based Crowdfunding on Kickstarter and Indiegogo. Combined they have raised over $200 million and counting for thousands of new ideas and inventions worldwide, if you’ve got an idea for a new product or invention visit fundedtoday.com to speak with one of their experts.
References and Resources
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