Raising $250k with AI for cats, the Pawly story

George: 0:00
Hi there. My name is George and I help independent creators launch their products and games. On this podcast, those creators share their journey from an idea to an actual product and everything in between. Today’s guest is Frank Carlson. He is the founder of the AI enabled Poly Ketdor. This first campaign got funded in just Five minutes and raised over 250,000 dollars from almost 700 backers. And today he’s going to share how he did it and how he got his idea off the ground. Welcome Frank.

Frank: 0:26
Thanks for having me.

George: 0:27
Yeah, absolutely. Thank you for taking the time before we get started. I think maybe what would be great is if you can just tell the folks listening, what is an AI enabled cat door? What is this product of yours?

Frank: 0:40
Yeah, of course. So what the Pawly Door does it detects when a cat tries to come home with something in its mouth, like a mouse or a bird, a lizard, whatever strikes your mind. And when it does detect that there is something in the mouth, the AI cat door just remains locked. Meaning that your cat cannot enter with prey in its mouth. So that’s the main feature of the Pawly Door and then of course there are other features that are very important for the users, like that it’s only their own cats that can enter the cat door.

George: 1:16
Yeah. Yeah. Cause we’ve all seen those Tik Toks where a cat comes home with a, like a rat in his mouth and brings it into the bed of someone who’s sleeping. And and there’s this whole subreddit, right? Like cat presents or presents from the cat, because that’s what cats do. They bring everything. In the house. I have five cats, so I fully understand this problem, which is why I’m very excited to talk to you. Frank, how many cats do you have? Cause you must be a huge cat lover to start this product.

Frank: 1:43
Yeah, honestly that’s a bit weird about me. I don’t have cats. You don’t have cats, no, but I can probably tell you why I’m still doing this project. So

George: 1:53
how did you, how did a man without cats start an AI enabled cat door business?

Frank: 1:58
Yeah. It’s actually because my girlfriend had two cats and when I was studying. Her cats were extremely active hunters. They brought home a mouse or a bird almost every night, and I was present at her place during these times. So I know the struggle quite well as well. And yeah, then she always told me that I should invent something to, yeah, to solve this problem because I was studying mechanical engineering. Yeah, that’s what I did.

George: 2:26
Okay. So you’re a mechanical engineering student. You have a girlfriend who has two cats who love bringing in dead things into the house. So you think there has to be a better way. And how many years ago was this?

Frank: 2:38
So that was about four years ago. But I didn’t start right there. I started about two years later or three years later, so it was five years ago. And yeah, I mean, after my studies concluded I started figuring out that. She’s not the only one having this problem, that there are other people with the same problem. And and yeah we tried to assemble a team and figure out how we can solve this problem.

George: 3:06
And then did you raise any funding, venture funding or angel funding before going into the whole crowdfunding journey?

Frank: 3:13
Yes, we did. We raised 250, 000 us dollars to support. The first one and a half years of research and development which also covered some part of our salaries, of course, because we had to live somehow and that also helped us, of course spending some marketing dollars on on the crowdfunding campaign.

George: 3:36
Yeah. So let’s talk about that crowdfunding campaign. You did really well for our first time campaign. You raised in us dollars about 250, 000, 700 backers. In fact, you already had 361 backers on day one. You got funded within five minutes. So by all means, a huge success. So what did you do to prepare for this crowdfunding campaign, given that you probably didn’t do this before?

Frank: 4:01
Yeah, first of all, thank you very much. Appreciate it. Really. Because as I said I’m a mechanical engineer by training. So as my co founder and we are not very skilled in marketing, let’s say. So this was really something that yeah, that came not so easy to us. What the most important thing that we did is find someone that has expertise in this place. So we tried to figure out how and where can we find someone that can help us build this campaign from scratch because we had no idea how to do anything with crowdfunding. Yeah, so we found Alex from Tefforce who already did several million dollar campaigns. And Yeah, he helped us with the structure of the whole campaign site. Also with, some details like how do you structure GIFs in your campaign page? Where do you place text? What kind of content do you need? How do you speak to customers? All these kinds of things are. Are small but so important to build a community that really trusts in what you’re doing.

George: 5:04
As a first timer what were some of the things that really surprised you about the whole crowdfunding process?

Frank: 5:10
How important the pre campaigning process is yeah as you said, we were fully financed in five minutes, which was a great success for us. But of course this was purely because we did a very long and thorough pre campaign journey that’s took us about five months where we already tested different kinds of ads on various platforms, mainly. Facebook and Instagram, and there we could get feedback from our early customers, what kind of features they want also what kind of marketing material they really respond to and what they do not really like. And that definitely helped us also after the launch to tailor our content more towards Yeah, what worked previously should work as well in the future. Previously it’s two or three months difference in time.

George: 6:08
So let’s talk some numbers. You had 361 backers on day one. How many email subscribers did you have before that?

Frank: 6:16
We had about 3, 500.

George: 6:21
Wow, that’s a, that’s like a great conversion, rate!

Frank: 6:25
Yeah. Yeah. That was really great. Also I must say for the first day, we did a lot of emails the week prior to the launch, we made like personalized videos. For the community and we got a lot of engagement before we launched. And this gave us more confidence on yeah, on the launch day.

George: 6:49
And did you do anything like a Facebook group or discord or just the emails?

Frank: 6:53
It was purely emails.

George: 6:54
Okay. And I don’t know if you want to reveal this, but do you remember the cost per email, the cost per lead that you had at the time?

Frank: 7:01
Yeah, that was also the, from my perspective, it was very cheap. It was about one, 1 10 cents.

George: 7:10
Oh, that’s great. Yeah, that is cheap. So 250 is the benchmark. And so anything below that is, Is cheap. So you had 3000 600 emails you said? Mm-Hmm. At a dollar and change. So let’s say maybe$4,000 is all you needed to spend on your pre-launch. Ads.

Frank: 7:27
Yeah. Approximately. A bit more about, 5. 5 we spent

George: 7:31
with some testing. And yeah, wow, that’s great. Was that a totally new thing to you being a mechanical engineer? I’m guessing you didn’t really have experience with Facebook ads either.

Frank: 7:42
Yeah, definitely. Definitely. But I have to say, I think for Facebook ads, there is a lot of of content available that helps you get some kind of idea how it works. Of course, you will never beat a pro if you’re, if you don’t use it on a daily basis. But the pre launch phase, I would say it’s definitely enough if you if you learn how the how the process works and you test it out yourself so that you can also try and learn from what works and what doesn’t work. I think that’s very important for, yeah for the founder of Or the marketing responsible at least in the project.

George: 8:20
Even for the founder, I feel like it’s just, cause it’s such an important part of just doing business nowadays, right? That it’s just such an important process to understand. Not just for the marketing team and then you launch your campaign, you get fully funded in five minutes, you high five everyone, but then you still have, you double the backer number towards the end of the campaign, you went from 361 to almost 700. Did you continue running ads during the campaign or what other promotions did you do?

Frank: 8:46
Yeah, we did. We did a lot of ads. So ads was ads on Facebook and Google were definitely our yeah, highest expense, let’s say. But we also did quite some PR, but we realized very quickly that PR should be started early as well and that we didn’t do so we didn’t yeah, we didn’t get into too many of the large newspapers and magazines and so on. Some worked and they work very well when you get into the larger yeah, magazines or newspapers. Had always which one, which

George: 9:22
ones worked the best

Frank: 9:24
for us? It was a local newspaper in Zurich was very good and one in in Germany. I don’t know, I don’t remember the name at the moment.

George: 9:37
Biggest supporters that you don’t remember the name. They don’t listen to this podcast in Germany. That’s totally fine. But wait, we’re talking about actual like paper news, newspapers, like old school paper newspapers.

Frank: 9:50
Yeah, we do. Of course they also have digital channels where most of the Supporters came from, at least since this is what we were tracking through Google analytics. But we also saw a lot of new backers joining at the day that these PR events happened, so yeah.

George: 10:10
And how did you reach out to newspapers? Because I think it’s an interesting thing where a lot of people would target the verge and gadget or in games and a dice tower, big gaming websites. But so you reached out to local newspapers in a local language in German. How did you even do that?

Frank: 10:29
Yeah, so I think what I learned from the PR game is really, you have to be so persistent. So you have, there are two things that, that, that helped. So either you have to have a absolute great products that people really want to talk about and you have to give certain larger audiences, you have to give them like How do you say that? That only they can write about it.

George: 10:57
Yeah. Like an embargo for example. An exclusive. An

Frank: 10:59
exclusive, yeah, exactly. For 24 hours or whatever. And then this works pretty well sometimes, but if you cannot ship, if you have a hardware product, then you cannot show them the hardware product in person. It becomes a bit difficult. Yeah, what we did is really we went over to their to their office and just said, hello this is our product. Should we have a talk?

George: 11:24
You physically went to their office. Did you have an appointment at least? Or you just went there? Yeah. Yeah.

Frank: 11:29
I had an appointment.

George: 11:31
Okay. Okay. Okay. That’s good. Otherwise you, that could also work, right? It’s very guerrilla style marketing. And. Was part of your pitch, given that they’re like local newspapers, was part of the pitch kind of the local identity saying Hey, we’re from this city in this country, and we are going international with Kickstarter. Was that part of the pitch

Frank: 11:49
to them? Definitely. Yeah. That really helps. And I think local newspapers are very supportive of at least here in Switzerland of startups that try to achieve something.

George: 11:59
I think that’s a great piece of advice because a lot of folks who don’t live in the U. S. or live in Europe or in other places, maybe feel like they’re at a disadvantage sometimes because of the location they’re in, but actually this would be an advantage where it’s easier to get local media to write about you because of that fact.

Frank: 12:15
Definitely. Also, of course, we also try to get into the large magazines, but it’s just difficult. At least we got a reply from all of them. But all of them said, Hey it’s a bit too late. If you want us to write about you you should tell us maybe a month or a bit earlier in advance and second of all, they want, all of them wanted to have the product, the physical product in their hands to test it and write Yeah, a report about it.

George: 12:43
Yeah, because it’s crowdfunding So crowdfunding is already speculative for them and already a little bit risky, right? And then also if there’s not an actual prototype, then it’s just an idea That they would have to write about and that’s a little bit risky. Yeah, exactly. So we only had

Frank: 12:57
our one prototype That was ready for shipping, and we couldn’t ship the one prototype to all of them at the same time. So that just didn’t work.

George: 13:07
Yeah. And and you brought that with you when you went to the local newspapers, I assume what were some of the things that maybe were a little bit harder or less effective than you had expected in this whole process?

Frank: 13:18
Yeah, to be honest, we expected the Facebook and Instagram ads to perform a bit better than they did. They still performed good, but in comparison to what kind of great results we had in the pre campaign phase yeah, it’s, it was just a huge difference, so yeah, maybe this is just also because we’re so inexperienced in this whole marketing game. But still it was quite, For us to see now we have better content than we had before, or at least in our opinion, we thought we had better content. But conversions were really not as high as what we. Wanted them to be.

George: 13:57
Do you remember the ROAS, the return on ad spend that you had during the campaign?

Frank: 14:04
So the return on ads, day one, it was 20 as I said we had to spend nothing more or less and had a hundred thousand in in backers and supporters. And then from there on it went down like this. I think that’s a natural phenomenon. I think in the end we came to a 2. 7, 2.

George: 14:25
7. Okay.

Frank: 14:26
Yeah.

George: 14:28
That’s a little bit on the lower end, but obviously you have a good run in the beginning and then it goes down and often, and I don’t know why this is a pattern that we see a lot where the, either the pre launch is super effective and then the live ads are more difficult or the other way around. And it’s. I don’t know what it is. Laws of the universe. Maybe it needs to balance you out a little bit, but it’s, yeah, it’s not uncommon. So you ended your campaign, you raised a decent chunk of money. You had some venture funding. Where do you stand today? Because this was about seven months ago from the day that we’re recording this, where, what is happening at the Pawly offices today?

Frank: 15:07
A lot is happening. A lot is happening. So we actually thought that we could ship the product now but unfortunately there are a lot of things happening in the world. And also just our planning was a bit too ambitious that we realized. Yeah, we had to postpone shipping which is good and bad. At the same time, of course, it’s not nice to Disappoint backers that yeah it takes more time on the other hand, you have to look at it in a positive way. It definitely makes the product better because we improved the product substantially in the last five months. And it gives us also the opportunity to connect with our community on a deeper level than just, hey, I pre ordered the system and three months later you have it, now you, they see, hey, this is really a journey this is not just, you Click, buy, get it, that this is what really happens in the real world.

George: 16:05
And what has been the response from your community when you announced that you have some delays happening?

Frank: 16:11
Mixed, to be honest, I expected it to be a lot worse. But it was really mixed. We had, I would say about 5 percent or maximum 8 percent of people that were really unhappy about it. And the rest, they were just like, Hey, it happens. We’re happy when we get it. And then there were the super supporters that were extremely nice and calming the other people down Hey, this is a Kickstarter campaign. This is just what happens.

George: 16:40
It’s good though. If people get really mad, I also think that’s a really good sign because it means they really care about this product, right? It just if they don’t care about it, they also don’t care if it’s late. That, it’s a certain passion that is a little bit uncomfortable to deal with as a founder, but it means that you’re also doing something right.

Frank: 16:57
Yeah, I completely agree. Completely agree. And of course, for us, it’s also not nice that we have delays. Yeah.

George: 17:04
And also, maybe these people just have really terrible cats that just keep bringing in, I don’t know, snakes, spiders. Like you don’t know what’s happening in their home. So you won’t believe what kind of

Frank: 17:14
messages we receive every day. It’s really crazy.

George: 17:16
That actually must be a great way to make content for you guys as well. Like once this thing comes out, are you gonna, like the ring doorbells, they basically use like footage from actual, or is that something you guys are going to do as well?

Frank: 17:30
It really depends on if our users let us do it, but this is definitely also an idea that we wanted to do, yes.

George: 17:37
Yeah, I would absolutely subscribe to your Tik Tok or your YouTube channel. It’s just a stream of videos of just cats trying to bring in dead animals or live animals into the house and then getting stopped by a door that doesn’t open. Like it’s just, there’s a lot of comedy in this already.

Frank: 17:51
Yeah, I agree. I agree.

George: 17:52
What’s next for the business? You’ve done your Kickstarter, you’re in the midst of fulfilling, you have a slight delay, but that’s normal. Are you continuing to take pre orders on your website? Or is that something you only start doing once you have some inventory?

Frank: 18:06
We are still continuing taking pre orders on in demand. That works pretty well here. We don’t spend any thing on marketing and we still get some revenue, not. Like a huge junk, but still there is something. And what’s next, of course, the industrialization is the most important part now for us. We really need to figure out how, yeah, certain parts of the industrialization are done. Because we underestimated how fast. Yeah, time passes, let’s say, and how many things are really part of an industrialization process. So yeah, this is really the main focus at the moment. And once we come closer to the production ready sample, then we will also start up our sales focuses.

George: 18:58
Do you guys have objectives for your post campaign sales. Do you, do you have a plan to go into the U S or Europe? Do you have certain numbers that you have in mind that you’re, that you want to sell, or are you just going to fulfill your Kickstarter rewards plus a little bit extra and then see where the demand comes from?

Frank: 19:17
We realized very quickly that the U S is not a market that is very interested in cat doors. Because, or not in cat doors of our kind, because in the U S 20 percent of cats can go out of the house and in Europe, it’s 80 percent of cats that can go out. So Europe is a much more attractive market for us. Interesting. Yeah. So did you know that going into this? Yeah, we knew it, but we thought, the U. S. is huge. 20 percent of huge is still huge. Um, and yeah, we then, we just realized very quickly with the ads that nothing performed. In comparison to all other places, more or less, everything worked out quite well. And in the U S it really didn’t matter what we tried. It just didn’t work.

George: 20:09
Interesting. Could that be, that could be product market fit, right? Like cats in the U S and go out as much. Do you feel maybe it’s also like a branding thing? Like, Are you guys being European? Do you feel like maybe it just, it looks a certain way that isn’t attractive to Americans? Do you have a clue of where this lies?

Frank: 20:26
It could be, of course it could be that it also has something to do with the brand itself. I honestly think that yeah, it’s a combination of both. It’s that the product is maybe not made for the American market, or we are just not strong enough in communicating what we really do.

George: 20:45
Yeah, or maybe you should do like a raccoon version or something for the U. S. That could be a thing. But it’s interesting now that you say this, I’m looking at your Kickstarter campaign and I clicked on the community tab. You can do that on any campaign and see where top backers. I came from and I’m seeing just like you said the top country is Switzerland. Then it’s Germany That’s the two places where you got in the newspaper, I guess united kingdom austria and the united states is you know, 23 backers, That’s really remarkable because yeah most campaigns United States is number one and then Botswana of all places you also have 10 backers. Did you get in the newspaper in Botswana as well?

Frank: 21:26
No, I was also so surprised when I saw that, but this was just a part of my family that was on vacation in Botswana that supported us with yeah, I don’t know. It was 10 bucks or so to keep the system rolling, let’s say on the first day

George: 21:42
while on vacation.

Frank: 21:44
Yeah, exactly.

George: 21:45
Interesting. Interesting. That’s super fun. Yeah. It could be right. Botswana, you don’t want your cat to bring in, whatever poisonous snakes and spiders they have there. But that was your family. The other thing that’s quite interesting about your campaign is I see you have 495 new backers and 199 returning backers. In most campaigns, this is inverse. So most campaigns have more backers that have backed on Kickstarter before. Whereas your campaign has more people that have never backed something on Kickstarter. Is that, was that part of your advertising strategy that you not target existing Kickstarter users? Or again, do you feel like it’s because you big in Europe and European newspapers, which folks who might not have ever backed a Kickstarter before?

Frank: 22:30
I, yeah, we, obviously we tried to target specifically Kickstarter users but it really didn’t perform as well as when we tried to target a bit older people that’s, that were very interested in cats on social media channels. And yeah, this made really this, it made more sense for us because the conversion rates were just better.

George: 22:55
Yeah. And I’m just taking a wild stab at this here, but I’m guessing that you’re looking for people who have a cat that goes outside. So that’s typically a home with a garden which is typically like. Not a city property. It’s not a condo in Manhattan. And those might be older people. Is that something that you knew before you went into this campaign? Or is that one of those things that you just learned from the crowdfunding campaign, exactly who this is for?

Frank: 23:20
We already had a pretty good idea of who our customer was since we. Spent quite some time in the pre campaign as well. So we knew more or less what the demographics are of the people that we really want to target. But of course, when you don’t charge anything, the demographics don’t really matter that much. So I would say it’s a mix of what you just said, I just said.

George: 23:46
Yeah. And I think that’s also one of the benefits of doing crowdfunding for a product launch. You mentioned that on one hand, people are more lenient with you when you have these delays, because they know that’s part of the process and they like being part of the journey. And on the other hand, you learn things like this, like your demographics and where those people are and are not in a crucial stage of your business, which is when you’re super early. Were there any other things that you thought, man, next time we are never doing this again, or things that you’re like, we are going to every local newspaper in Europe. Like what were your biggest takeaways from this whole experience?

Frank: 24:21
I think I have four. So one major takeaway was that it would prepare a lot more content so that we can test. Early a lot more what works and what doesn’t work. So we only took two recording days where we did the main video. And then a few ads on another day, but I think it would not be a bad idea to have some more yeah, different styles that you can really try different hooks. And find out what people, yeah, really and what gets them excited about the product in the first few seconds of a video. Then the second one is the PR thing that I mentioned. I would prepare several hard, if it’s a hardware product that would produce several prototypes that are ready to ship. So that we can send it to different PR outlets. So that they can test it. There is enough time to send it to different people. And the chances of you getting covered by a large newspaper just increases dramatically with it. And yeah, community building, I think. We did quite a good job, but I think you can do it a lot better even just by providing more content like a blog post more more frequent newsletters to keep people engaged. I think this, especially for day one yeah, it can help boost performance tremendously. And we also focused on that quite late, just maybe the last two weeks before the launch.

George: 26:05
Also I think, especially when it comes to pet products, community is relatively easy because people love posting things about their cat and they love reading about other people’s cats. And I saw the funniest TikTok, I would not recommend anyone do this, but I thought it was really funny. There was a guy who had a. A dog brand. And he would ask, Hey, post a picture of your your dog. And then people would do that. And he would use a fake Facebook account to write a comment. Wow. That’s such an ugly dog. And then the comments would absolutely explode with people fighting over, someone calling someone’s dog ugly. And then Facebook picks the algorithm, picks it up as a post or an ad that does incredibly well because of all that organic traffic. And so that was one of the tips that I once heard about specifically for pet products, but I wouldn’t recommend you call any your backers dogs, but Ugly but yeah

Frank: 26:56
just sparking some kind of spicy topic. Yeah.

George: 27:00
Absolutely. There’s nothing better than with pets and babies. Both, both those categories would do very well. Frank, thank you so much for your time and sharing your journey. Super, super interesting. I really appreciate it. And if people want to get a Pawly AI cat door. So if you have a cat that brings in Snakes, rats, mice, birds, and you wake up covered in blood every morning and you want to stop that. You can go to Indiegogo. The in demand campaign is there. It’s the Pawly door. We will link it in the show notes. And Frank is on track to deliver soon. Get yours in while they’re hot. And Frank, thank you so much for your time.

Frank: 27:37
Thank you very much for your time and for having the chance to be here.