You’re the Boss Blog: How Crowdfunding Worked for One Timely Start-Up

On Social Media

Generating revenue along with the buzz.

Courtesy of braGGs Kara Gorski (left) and Kristin Gembala, sisters.

Last fall, I wrote a post about the crowdfunding campaign of a start-up known as braGGs. The company, based in Alexandria, Va., has developed a patent-pending bra for women who have had reconstructive breast surgery — “reconstructed bras for reconstructed girls,” as the Web site puts it.

It was founded by two sisters, Kara Gorski and Kristin Gembala, who have both undergone double mastectomies. After their mother died of breast cancer and after Ms. Gorski was diagnosed with breast cancer, it was determined that they were carriers of the rare BRCA1 gene mutation, which significantly increases the risk for breast and ovarian cancers. Ms. Gembela chose to have her surgery prophylactically — the same choice Angelina Jolie recently made public.

After reconstruction, the sisters expected to be able to wear regular bras. When they learned this was not possible, they decided to design and create a reconstruction bra specifically for women like them. They started with $25,000 from their own savings, and then they turned to the crowd at MedStartr, where they raised $10,000 in donations and pre-orders over three months in 2012 to begin manufacturing a small run of their product.

As soon as they received the funds, they started working with manufacturers, but finding the right one was not easy. “We started working with one manufacturer,” said Ms. Gorski, “but it was not a good fit for us. I just had a bad gut feeling about the guy, and one day he yelled at me over the phone and acted liked he didn’t need our business.”

They went looking for other manufacturers. “It was hard because we are dedicated to being made in the U.S.A.,” she said. Eventually they picked one that they are happy with. “Our manufacturer is an absolute professional, makes high quality garments and works with low minimums that enable us to introduce and test smaller quantities as we develop an entirely new market.”

Raising money can create pressure to deliver a product by a specific deadline. Once the campaign ended in October, braGGs was on the hook to deliver bras by January. “We felt such an obligation to get the product to the people that funded us that we almost made a deal with the wrong manufacturer,” Ms. Gorski said, “We fired our manufacturer in December and missed our deadline by six months. We had to put in the extra time to find the right partner. We needed to make samples, wear test them and make adjustments, so that our product would be what we promised.”

As of this month, Ms. Gorski said the company has shipped bras to all of those women who have completed their surgeries and sent in their sizing information. The sisters have also turned their provisional patent into a final patent application, which cost nearly half of the $10,000 they raised on Medstrtr. The process will likely take three years or more to complete due to the backlog at the United States Patent and Trademark Office. They plan to continue production even if not awarded a patent, but they expect a favorable outcome.

BraGGs is now selling bras online and at a boutique in Washington. The company has released one design and is finishing up a second that it plans to roll out this fall. The sisters have also started a monthly newsletter through their Tumblr blog and through MailChimp, and they pitched ABC’s “Shark Tank,” although they were not selected for the show. Because the $10,000 went quickly, they have had to invest another $10,000 of personal funds to keep the business going, and they are looking into obtaining a Small Business Administration loan. They are also open to talking with investors — “particularly ones with broad manufacturing and distribution know how,” Ms. Gorski said.

Ms. Gorski said the hardest thing about crowdfunding was running the project and the business at the same time. “While crowdfunding should be a piece of your business, it can tend to take over and become your full-time job.” It’s also important, she said, to keep in touch with the people who give you money and keep them updated on your progress. “When we knew we wouldn’t make our January delivery deadline,” she said, “we kept our funders informed and they were pleasant and super understanding.”

Since Angelina Jolie’s decision to talk publicly about her mastectomy, there has been a surge in interest in the braGGs product. Ms. Gorski and Ms. Gembala plan to expand their e-commerce site and hire a sales representative to get their product in more boutiques. But Ms. Gorski said there were no plans to do another campaign. “Our crowdfunding campaign was an awesome experience that launched our brand and our product,” she said. “But it was also a ton of work.”

Melinda Emerson is founder and chief executive of Quintessence Multimedia, a social media strategy and content development company. You can follow her on Twitter.

Article source: http://boss.blogs.nytimes.com/2013/06/21/how-crowdfunding-worked-for-one-timely-start-up/?partner=rss&emc=rss