Co-founder Damien Ng on the importance of ‘keeping it real’ for the customer
Crowdfunding is a modern phenomenon. More startups are, well, starting up all the time and using crowdfunders like Kickstarter or Indiegogo to draw people in from far and wide who can invest in their products and help fund their enterprises. It’s a phenomenon that’s been growing rapidly over the past few years in Hong Kong. But how many consumers have the confidence to put cash into a project which they haven’t actually seen in person? Isn’t it more effective for potential funders to see the ‘real’ product instead of just looking at it on the internet? According to Backers, a company that’s based at theDesk co-working and events space in Sai Ying Pun, a project has much more chance of success if people can actually see it in front of them before they invest. And they’ve built their rapidly expanding business around this pretty unique ethos.
Backers launched in November 2015 in Lai Chi Kok with just 16 products which were going through crowdfunding. The firm then moved to theDesk co-working space in January 2017 and concurrently enrolled in theDesk’s Startup Funding Mentorship Program. The company now boasts 71 products from a variety of startups and has more than 300 on the near horizon. It utilises the O2O model, namely online-to-offline or offline-to-online, which is a business strategy that draws potential customers from online channels to physical stores, or vice-versa. With Backers, customers looking at possible projects on the company’s website through videos and pictures are encouraged to visit its shop at K11 Art Mall in Tsim Sha Tsui, where they can decide whether or not to invest after seeing the product ‘for real’ and in person.
Damien Ng, co-founder and known as ‘the locomotive’ of the company, tells us, when we meet, that Backers, in essence, helps businesses that are crowdfunding on platforms like Kickstarter, Indiegogo, FlyingV and Zeczec to physically reach out to the mass consumer markets. “We basically get the products from the companies who’ve produced them,” he says, “and make them real for the consumer. It’s important to keep it real so a project has the best chance of success. Crowdfunding, across the world, has so far primarily remained in the virtual space. But many people lack confidence when it comes to trusting a product on the internet alone. They want to see the real thing in front of them. With a physical presence, we make the crowdfunding innovation and the products more approachable. This also leads to more direct feedback from the consumers so the products can be fine-tuned for their launch. That’s the core part of our business.”
Backers was founded by Panda Ho, who came up with the idea after looking for ‘goodies from Kickstarter’. He asked around his friends and colleagues to see who was ‘brave enough to back a project’ with him so they can ‘get a better early bird price and split the cost of shipping’. But he was presented with a problem as many friends ‘liked the project idea but didn’t want to back it until they saw the real thing’. He then discussed the problem with Ng, his pal, and they both decided to create an entirely new business which would ‘help others see the real thing’. Thus Backers was born as third member Larry Leung, who is the head of projects and was also a key figure in the creation of the Foodpanda delivery service, came on board. The firm has since worked with businesses and projects across the globe from its base in Hong Kong. “Our store concept has been really well received by the mass community in Asia,” says Ng, “and we’ve been constantly featured in various media.”
The secret to Backers’ success is its store at K11. In fact, there are plans for two more soon, in Taiwan and Singapore, as the team takes on Asia. “When we opened in 2015,” says Ng, “we weren’t sure how it would do. But we did really well by breaking even in just four months. So we opened in K11 in July last year and we now have 71 products in our product pool, with more than 300 in our upcoming project pipeline. Expanding out of Hong Kong and across Asia has been fun! So many people around the world are so interested in seeing new ideas. This international interest has helped us a lot. Our idea now is to have physical stores across all the major cities in Asia, so consumers can really touch and feel the latest innovative crowdfunded products.”
Before Backers, Ng, who says basing the company’s office at theDesk has helped in its success story as it’s a ‘really spacious while retaining privacy for its members’, nurtured several startups and helped develop the Asia market for first-time firms from overseas. He’s known as ‘the locomotive’ because that means he’s the driving force. And he comes with award-winning pedigree after he scooped the E Craig Nemec Achievement Challenges prize at the Global Venture Labs Investment Competition in Austin, Texas in 2011. “On a Kickstarter scale,” he says, “a project with 2,000 backers and the equivalent of half a million US dollars raised is considered pretty good. We’ve had a few projects with up to 9,000 backers and more than US$1million raised. Coincidentally, most of these projects concern travel-related products: there was an anti-theft backpack, a collapsible suitcase, a baggage compressor and some other items. I think people like to travel a lot…”
Other successful products that have been plugged ‘for real’ by Backers include the Solar Paper, which is the world’s smallest charger for the amount of potential wattage it can generate, charging smartphones in about two-and-a-half hours on a sunny day. And then there’s the stylish Barracuda Collapsible Luggage series. We’re also big fans of the Eco-Friendly Bamboo Toothbrush. And the company’s name? It comes from the fact that the team, well, backs crowdfunded projects. Simple as that. “A lot of shops are retail-centric,” says Ng, “with the aim to, in short, sell their products. We wanted to run our shop from the eyes of the backers and the consumers themselves, so we could actually tell the product creators what the backers and the consumers want. We actually try to cover more than just selling. I’ve worked at startups and, with these new companies, a really important phase for a new product is the ‘education phase’. Ordinary retail outlets don’t need to do this because their target is, simply, to sell. That creates a USP for us to help creators to reach to these early adopters and educate them on the new project ideas.”
“There have been cases,” continues Ng, “where people are not confident with backing or financially assisting startup projects because the risk is generally high. We hope our presence helps to mitigate that risk because products can start the ‘education phase’ with consumers as early as the prototyping stage.” Ng, who says Backers is creating a monthly theme soon for its products from across the world, says there’s been a good few challenges getting to this point. “Yeah, we’ve had to cut our social lives out and work in a bit of a blur at times,” he says. “Our team likes all the projects so much, however this leads to the most active time for discussions becoming 2am because we like trying out the new product samples. It’s our hobby. Ha, is this really a challenge? I don’t know…”
When it comes to inspiring other startups, Ng advises that new businesses need ‘never be afraid of thinking outside the box and hitting bumps’. “If your path is too smooth,” he says, “you’re probably not doing it right.” Ng also says that Hong Kong ‘is becoming a really effective city for crowdfunding campaigns’. “It’s all about information transparency,” he says. “Hongkongers see that it’s really important to actually see the product before they fund, plus the businesses here want to learn about their product not from one source but from many of them. So we’re proud to be a Hong Kong company that’s really gaining success in a new and unique way. In the future, we hope to be the de facto platform that sets the standards for new product launches across the world. And we want to say that this new way of crowdfunding was created in Hong Kong. It’s a bright future, we hope!”
Damien Ng, in brief:
NAME: Damien Ng
POSITION: Co-founder and ‘the locomotive’
FROM: Hong Kong
BUSINESS LOCATION: Rents an office space at theDesk, Sai Ying Pun
FIND OUT MORE: Visit backerstores.com to learn more and get involved!