A 24-year-old made $345K in 2 months by beating Kickstarters to market | Hacker News Reader

A 24-year-old made $345K in 2 months by beating Kickstarters to market

cnbc.com

175 pointsesalazar63 comments

Do I understand correctly from reading the comments here that he just found the 'knock-offs' on alibaba and ordered them?

The article made it seem as if he actually created the knock-offs himself and then found a factory to make them for him. Which is it?

Also, if I had an idea for a small little toy/gadget, how would I have to go about finding someone in the world who can make it for me in a factory?

Yes, somebody other than him made the products. He didn't actually make blueprints and make a Chinese factory make them. The real genius is some forgotten guy in China. He made at least 50'000 USD which I suppose buys you a lot more status in China.

I really don't like being negative but this article feels has the same feeling as the Taboola ads at the bottom of the page. This guy made a smart deal sure, but really he didn't create anything new so I'm a bit disappointed with the article since it's not about someone who managed to complete an engineering project in record time or something really cool... but just a $ sign to spark interest.

If you want to manufacture something I guess that you go about basically the same way as you would if you wanted to find a company that creates a software product.

Thank you, and the rest of the commenters for the answer, the title and article where somewhat misleading and I didn't watch the video.

You are right about the article being poor, it is basically just click bait and it is annoying to have to waste brain energy on trying to decipher this incoherent story.

On the plus side though, I have just learned that alibaba factories try to outpace kickstarters and the like, that is pretty interesting and quite clever, despite the sneakiness.

A good way to handle stories like this is to flag them.

Apparently the "source" must have been something like this:

http://www.dx.com/p/updated-version-fidget-cubic-toy-for-foc...

Yes, that's what he did. The title makes it seem a bit like he designed the products himself, but the article/video make it pretty clear that he just ordered knock-offs from Alibaba.

>As with Cozy Bag, Chinese manufacturers on Alibaba had been offering comparable products since shortly after the Kickstarter appeared. Thanks to their experience, Jack and his partners were able to pivot quickly and use WordPress and its sales plugin WooComerce to launch their Stress Cube site by the end of November. They spent less than $5,000 on start-up costs, mostly on a bulk order of 1,000 plastic cubes at $3.65 apiece. The plan was to turn around and sell each for $19.99.

I'm actually pretty interested in the same questions.

It's sort of like seeing high frequency trading arbitrage happening. Reacting to market demands faster than others leading to reduced margins for late entrants.

I have no idea on what grounds they would try to shut it down if it was just an alibaba product the guy ordered and marked up.

The title makes no claim that he engineered these widgets, so I don't see how this is at all misleading. What he's done is impressive precisely because of how little effort he put in -- he managed to make a ton of money by bringing someone else's idea to market.you could try to claim that it wasn't this guy that brought the widget to market, but rather that it was the people in china -- but then you'd be mistaking the market that is Alibaba for the general marketplace (where normal people buy stuff), which is what's meant here by "brought to market". There's clearly a ton of value in being able to give people what they want -- in this case the Kickstarter people put in a ton of effort just to fail spectacularly.

So, no, this wasn't an incredible feat of engineering -- but, then again, the article never claimed it to be. It is, however, an incredible story of providing consumers with what they want and making a sizable profit in the process. As someone who works to make money (and not the other way around), this is something that appeals to me.

Is my perspective unique here? Because I see a lot of people missing the point entirely.

The video states that he just ordered copies off of alibaba, and then sold them in the canadian market. The article later talks about him ordering stuff off of alibaba.

Here's a viable business model (I want 10% of profits):

* Create Kickstarter with innovative new idea, take money and fund it.

* Wait for someone in China to copy it.

* Order the things at a massive discount (ie their normal price).

* Send them to your backers.

Keep the rest of the money for making a single slick video.

How about this improved business model:

* Create Kickstarter with innovative new idea, take money and fund it.

* Wait for someone in China to copy it.

* Order the things at a massive discount (ie their normal price).

* Set up a new store to sell the knock offs.

* Stiff your backers.

You end up with all the kickstarter money and the knock off money but only have to pay for half the merchandise.

Of course, once it becomes a pattern there will be the Chinese corollary, that appears to maka a knockoff, then waits for a big order.

Was going to add a part about stiffing the chinese suppliers as well but you'd probably end up like this guy (separate article currently on HN front page):

https://news.ycombinator.com/item?id=13532856

https://www.nytimes.com/2017/01/31/world/asia/xiao-jianhua-c...

You could call it "Startup LLC Jackson".

https://twitter.com/StartupLJackson/status/60829857553815961...

There truly is nothing new under the cheap chinese knockoff sun.

I'd say lots of these entrepreneurs are designers or engineers who were passionate about an idea they had and began crowdsourcing their idea, without much business experience. They are gonna learn the hard way that time to market is a bfd.

A product is absolutely useless until its in the hands of the consumer.

The value of execution. Being able to get something done is a powerful thing and this is one way it can be monetized. Reminds me of the German startup knockoff company that made its mark doing successful US startups in Europe.

that company is called Rocket Internet, for anyone who wants to look into this story.

So basically this kid made money by selling cheap knockoffs before the original designers could launch a patent lawsuit? Seems like the moral of the story is that you can make some money before the slow gears of our patent system kick in.

Also, links to those stupid inflatable bags on alibaba were everywhere once the kickstarter went viral. The article makes it sound like the kid magically found it.

> selling cheap knockoffs

I'm not sure how you define a cheap knockoff, but in this case it seems like he's using the same supply chain that the kickstarter campaigners did

> before the original designers

I fear that you reveal you didn't read the article. The first product he ordered and sold was five years old, paraphrasing the article "the only thing new was the buzz from the indiegogo campaign"

> launch a patent lawsuit

Woah now there skipper. You're assuming that the people creating the campaigns are the original inventors, that their inventions are patent eligible, that they have filed a patent, and that they can afford to protect them.

In the case of the main example (fidget cube) that's pretty much what's happening, from what I've seen.

As their kickstarter campaign went viral, several clones started being offered on aliexpress and the like. They are flat out clones, look just like the original and (AFAIK) there's not some common ancestor here that they're both copying, it's a case of Antsy labs had the original design and that got cloned.

Antsy labs have been aware of the knockoffs and have actively been trying to prevent them (to little effect from what I've seen) and as it mentions in the article there is a patent pending on Fidget cube.

The problem for the Kickstarter creators is that they're basically slower to market than the clones, and in many cases the consumer doesn't really recognise the difference (if you look at twitter etc you can see quite a few people angry about "bad quality" fidget cubes they've received which turn out to be knockoffs)

>that they're basically slower to market than the clones

This raises an important question about economics, free markets, and what it is for a product to be a 'clone.' Is it only necessary to have an idea for a product and market that idea or must one also bring it to market quickly?

Apple wasn't successful because of the ideas but because of the implementation behind them, is it wrong if another market participant moves faster? What does this say about the crowdsourcing model for inexperienced manufacturers/designers?

Would something like a Stress Cube even be eligible for a patent? I don't see the technological novelty to be honest. Maybe I'm misunderstanding how patents work.

Considering that the magic 8-ball has a patient, why not? (Granted it is actually an interesting patent since it solved the problem of air bubbles obscuring the answers on the answer die) https://www.google.com/patents/US3119621

It'd probably be eligible for a design patent or trade dress protection.

Just looked up the Fidget Cube. It is $22?! Yet the Stress Cube "knockoff" is under $5. It is a little plastic and vinyl cube with some switches.

Not to mention the Fidget Cube is still on pre-order whereas it looks like the Stress Cube has been available since around the end of last year.

Is it a kinda crappy thing to do? Yeah I think so. However how on earth are Antsy Labs not selling these things yet?

Also worth mentioning that the quality of the stress cube is not great. A coworker ordered one and two of the pieces didn't work out of the box. It's very grainy looking plastic (almost seems 3-d printed) that was poorly glued together.

But 5 vs 22 is a fairly big price differential.

There's an excellent documentary on the hardware/hacking ecosystem in Shenzhen on YouTube: https://youtu.be/SGJ5cZnoodY . A lot of people there seem to embrace the ethos of moving fast and ignoring IP laws (both original creator and spoofer) because by the time you get a lawsuit or patent filed, the tech will have moved far beyond what you were trying to protect, and it will no longer be worth your time.

Basically, move fast and try to keep up. It's crazy how fast the tech cycles are there.

I wonder how a person in the West can connect with people in Shenzen to import products, or even to collaborate. There are niches I think are ripe for targeting here, if they only knew there. Can anyone recommend a meeting place online?

Alibaba?

Thx, very interesting documentary.

Time is definitely huge. I've got one of the knock-off fidget cubes on my desk right now, a Christmas gift, but my kickstarter-backed one doesn't arrive until later today. I expect the real one to be higher quality, but it seriously got scooped.

Yeah, I supported the so-called NiftyDrive(a micro-sd adapter that fits within your SD card port in a macbook) because it was such a cool idea at a time - but they had several delays, and in that time, I could just get an identical adapter off ebay, delivered next day, for 1/3 of the price.

Also, supported the nifty drive... great idea, by the time I got it, I didn't need it anymore.

Today's mail arrived, and yes, as expected, the KS version is nicer (except for a few things).

What wasn't said in the article/video is that Chinese mfgs are scooping kickstarter.

One of many stress cube listings on Alibaba https://www.alibaba.com/product-detail/Hottest-stress-cube-i...

? Did you read the article? They literally say that and show a screenshot.

"As with Cozy Bag, Chinese manufacturers on Alibaba had been offering comparable products since shortly after the Kickstarter appeared."

Re-read what I wrote. The 24 yr old is good at marketing..not doing anything special.

The interesting aspect is that Chinese mfgs are all over Kickstarter. As others have written, makes it a more difficult proposition going forward.

Step 1. Launch a Kickstarter - without any plan for manufacturing. Step 2. Wait for Chinese manufacturing to copy it. Step 3. Buy as many of the product from those manufacturers. Step 4. Deliver to Kickstarter backers ahead of schedule.

Zero risk, minimal effort, and happy Kickstarter backers. All Kickstarters should adopt this model.

Oh god that might actually work..

It's at least a little risky because you're depending on the Chinese knock off coming in at the right price. Though I guess you could just sit on the Kickstarter money while you wait so you don't have to raise money if one doesn't materialize.

I agree with what you are you just said... but in the original comment were you trying to say that the Chinese Manufacturers should be getting the credit instead of this dumb kid?

Also... being good at marketing is indeed something special. Many a start-up has floundered because they couldn't market themselves properly.

Not saying this guy isn't a leech who doesn't deserve the praise from this write-up, but it is the end of the day and I guess I'm just feeling a little feisty. Sorry...

I dunno, I see this more as an Instagram marketing play than a 'knock-off' play. The fidget cube is little significance, it could have been anything. He found a trend, got supply, and marketed it on the right channels.

Link is dead for me. Get's a 404 on CNBC's site.

Here's the Google cache of it: http://webcache.googleusercontent.com/search?q=cache:LGuJ4sN...

So RocketInternet but with products instead of websites?

Haha. Actually, RocketInternet is for startups/websites like the age old knockoff's for products. This is nothing new, but he must be good at marketing.

I was looking at making an IoT doodad recently that already had a pretty crowded market because everyone who is currently making the same basic idea, including US and Chinese manufacturers, sucks at software.

The one US-based iteration of this product, understands what consumers want, but it's software very much looks like it was produced by hardware people. It works, but only barely. I bought it second hand yesterday and there are already two software-only features I would add that would have increased the usefulness of the product significantly.

The Chinese versions are so damn cheap, I wanted to buy one, but their software (even from xiaomi) doesn't even meet my basic requirements.

Part of this is probably the fact that consumers (like me) are stingy and software developers are expensive, and you have to keep paying them even after you've gotten all the money you're going to get from consumers since people hate paying for subscriptions.

Maybe these knock off makers will get better with software, I don't know, but at the moment I feel like there's a big gap in what knock off makers can do.

What seems weird about this is that he did very little of actual 'beating Kickstarters to the market'. If you read the article, he is just selling things that are already listed on alibaba(so it's the chinese manufacturers who are beating Kickstarters to the market).

So the question is: where does the margin of the guy in the article come from? If you read the article, he bought the toys for 2.5$ or so on alibaba and sold them for 20$. That's quite a markup for...some marketing. You could at any time probably have gone to aliexpress and gotten the same thing for 4$ including shipping.

I think the answer is that not enough people in China are savy in how to market their products to US+EU. And not enough people from US+EU are aware of the gadget candy-store that is Aliexpress. The overall profit is too small for a large company to swoop in, so what is left are some shady indiegogo campains (that try to sell a product that is already offered on alibaba) and the kind of company portrayed in this article.

Ordering things on Aliexpress as a "normal" customer is not a great shopping experience because:

- there are thousands of sellers selling the same thing and finding the one that isn't a scam is difficult -- not difficult as in, flying to Mars, but harder than ordering from Amazon FBA (although AMZ is getting worse by the minute in this regard)

- shipping times are VERY long (3 to 5 weeks) unless you're willing to double the purchase price for express shipping (which will still take around a week)

Therefore, there is opportunity for arbitrage where you order lots of gadgets and then sell them in your local market with very good shipping times (and less choice between competing, identical offers).

I mean, I ordered a few of these on Amazon for $5 apiece just a couple of weeks ago, so yeah, you can definitely get them that cheap.

Wow! I can't decide if this is innovation, disruption, or something a little less than ethical. I also wonder what the IP issues about this might be.

Those three almost always go hand in hand in hand.

> innovation, disruption, or something a little less than ethical

¿Por qué no los tres?

Definitivamente los tres.

Article is not quite clear but it appears it was $345K in sales not net.

The guy's edge is marketing which has been always been the great differentiator.

Of course, it could be just luck as there must be thousands of people attempting the same type of "business".

Reminds of that Ipod clone kid in Australia which HN had an article about a few years ago. Made some 100K from selling iPod clones in late 200Xs.

It is confusing, but it appears he paid $70,000 for the product, throw in $5-10 for site, ads, marketing etc. Still doing quite well.

Usually if you ask a company for a customized product it won't happen or you have to be willing to put a lot of money in it. But if you go through the work of mocking up your imagined product on Kickstarter, China may get it to the market for you at no cost.

Now that's true innovation!

Good for him!!!

I had a similar idea years ago where I was searching through RentACoder projects for potential product ideas. I figured that there had to be a few gems in there, but never found anything worthwhile. Glad to see someone else made the same concept work!

Saw the article mention FollowLiker http://www.followliker.com not really sure what it does. Is it for creating a bunch of fake accounts?

Page not found

Man makes business out of identifying market, finding supplier, ordering product, reselling at higher price.

Amazing.

And all of the "I have an idea I just need a technical cofounder" (ie. management and sales and wannabees of every company) cried out in horror, tears, and injustice !

Reply on news.ycombinator.com