UnicoMarketing: How Ambi Climate rebounded from its failed crowdfunding campaign

Thursday, 23 October 2014

How Ambi Climate rebounded from its failed crowdfunding campaign

Julian Lee of Ambi Climate speaks while interviewer Casey Lau of SoftLayer listens.

We have written a lot about crowdfunding on Tech in Asia in the past, but few companies have had campaigns as bumpy as Ambi Labs. A Hong Kong-based startup, the company’s flagship product is Ambi Climate, a connected device that automatically controls one’s home air conditioner. Ambi Climate originally launched a crowdfunding campaign on StarHub’s Crowdtivate, but failed spectacularly. The company bounced back and its current on-going second attempt at crowdfunding reached its funding goal in nine hours. It’s now en route to raise US$100,000 – four times their target amount.

For our Singapore Meetup last week, we invited Julian Lee, co-founder and CEO of Ambi Labs, to talk to us about his new product and his two crowdfunding campaigns. Lee was candid as he shared details with moderator Casey Lau of SoftLayer.

The genesis of Ambi Climate, solving an Asian problem

Why was Ambi Climate created? The team wanted to focus on solving Asian problems. Observing the global hardware market, Lee felt that most of the innovation in the space was happening in the US or Europe. As a result, these companies were designing products for a Western-centric lifestyle, one where home owners use their heater in the cold season and the aircon in the hotter months.

But in many Asian countries, air conditioners account for the highest energy consumption of any home appliance. One common complaint among Asian consumers is that when they turn on the aircon before bed, they’ll get woken up hours later because the room gets too cold.

So the Ambi team worked on Ambi Climate for two years to help households in Asia auto-moderate the temperatures in their homes through the air-conditioner. Ideally, this would also help consumers save money on their electricity bills.

Making hardware

Over the past two years, Ambi Labs has iterated its product constantly. The company released a minimum viable product (MVP) early and placed it in the hands of friends and family in hopes of collecting data. For example, as a form of climate-control, Ambi Climate has to work well in different seasons. In order to make sure the device optimizes properly, it has to understand how temperature and humidity varies in different climates.

Lee urged the audience members considering launching hardware startups to do their homework before sourcing. Can you actually get the parts you need? How can you check whether the parts are really available in China?

The crowd watches a crowdfunding video of Ambi Climate.

The road to crowdfunding

Since hardware startups require a lot of upfront investment, crowdfunding is a great way to pre-sell products along the way while continuing development and production.

For the Ambi Labs team, crowdfunding was an obvious route. But after looking at international crowdfunding platforms like Kickstarter and Indiegogo, they were fearful of being drowned out by other projects on those popular sites. Lee and team did not think that Ambi Climate would have a strong global appeal, and there was a real need to show validation in Asia, their market of choice. Their key question was, “How do we engage with the Asian consumer?”

That’s where Crowdivate came in. Crowdtivate is co-managed by Singapore-based telco, StarHub, and its partner, Crowdonomic, Singapore-based crowdfunding site.

While a crowdfunding campaign typically takes two to three months to set up, Ambi Labs only had four weeks to plan for a campaign to coincide with the launch of Crowdtivate itself. As the most successful campaigns have a lot of marketing done prior to the launch, this meant that Ambi Labs had a much shorter timeline.

Ambi Labs launched on Crowdtivate and barely made 34% of its targeted US$40,000 at closing. Lee shared that while pageviews for the YouTube video were high, conversion wasn’t.

Iterating crowdfunding campaigns

After this first failed attempt at crowdfunding, Ambi Labs decided to try again, but this time on Kickstarter. The team was determined to apply lessons learnt from their first go. They redid all the copy and even made a new video – “almost nothing was carried over,” said Lee. They also had to abide by Kickstarter’s bundling rules, offer different tiers of rewards, and do more outreach on social media.

Ambi Labs doubled their spending on a video – the team shelled out US$5,000 on the first video for Crowdtivate, and US$10,000 for the one on Kickstarter. This investment paid off, as the second video had 1.5 times the number of views as the first. While conversion on Crowdtivate was only 0.1-0.2 percent, they saw around 0.5-1 percent this time around. Ambi Climate’s Kickstarter campaign also got an additional push when it was chosen as a staff pick.

Even though Kickstarter is a global-facing platform, Ambi Labs still managed to effectively reach its target customer segment in Asia. 60 percent of the backers of their Kickstarter hail from Asia-Pacific, while 20 percent reside in the US.

As present, Ambi Labs has raised almost US$90,000 – well over its targeted US$5,000 – and it still 21 days left to go.

If you like finding out more about the back stories of founders and companies, join us for our next Meetup with Bruno Araujo of iMoney. It will take place in Manila, Philippines tonight, Thursday 23 Oct at 5PM. We’ll be looking at how a two-year-old startup has grown to be one of the leading online personal finance platforms in Southeast Asia, with a valuation of US$ 20 million.