When it comes to the road to success in Silicon Valley, Eric Migicovsky was definitely on the right path.
His idea for creating a watch that can display messages from your smartphone was embraced by Y Combinator, the prestigious business incubator. While completing the program, he outperformed others by actually generating revenue. He later raised $375,000 from four angel investors, including Paul Buchheit, a partner at Y Combinator, and Tim Draper of venture capital firm Draper Fisher Jurvetson.
Then he hit a roadblock. A big one. Migicovsky couldn’t raise more money. Few investors were interested in betting on a hardware startup, or dealing with the headaches that often come with manufacturing goods.
So Migicovsky posted his watch on Kickstarter, a “crowd-funding” website where anyone can pledge money for creative projects that have yet to be completed. In the last few days, roughly 26,000 people plunked down their cash, with many pledging hundreds of dollars and about a half dozen folks promising $10,000 or more.
In return, they get a discount on the watches. The startup, Pebble Technology, plans to ship the first batch in September. However, like all projects on the site, there’s no guarantee that the creator will follow through. Backers could lose their money, but Pebble has been making BlackBerry-compatible watches called inPulse for years, unlike the many Kickstarter hopefuls with little more than an idea.
So far, Migicovsky has raised more than $3.8 million, making the watch the highest-grossing project since Kickstarter was founded three years ago, a spokesman for the website said. The fundraising will go for another 31 days, and then Pebble gets to collect the money it has raised.
Kickstarter takes submissions from aspiring authors, hardware tinkerers, thespians and video-game developers with good ideas and video cameras to shoot their pitches. Some 1.75 million people have given more than $185 million to 20,000 projects on Kickstarter, a spokesman said.
Migicovsky said he’s more adept at pitching to consumers than to venture capitalists.
“With VCs, they worry about models and size of market and stuff like that,” he said. “With consumers, one of the things I love about the videos, we just showed how you’re going to use it.”
Pebble’s promotional videos show people using the watch to track their time and pace while running and bicycling, and having text messages delivered to their wrists. Oh, and it also tells time.
The money has allowed Palo Alto, California-based Pebble to double its staff in the last few days to 10 from five, he said.
“It’s very clear that the Kickstarter guys have that viral path down pat,” said Migicovsky, who graduated from the University of Waterloo in Canada. “When a cool project shoots up, it shoots high.”
In his pitch to potential new hires, he tells them to check Pebble’s Kickstarter page at the beginning of the phone interview to see a live tally of investments.
“After we stopped talking,” he said, “I told them to refresh.”
Update: Corrects when Kickstarter was founded.