Headphones, High-End Design And The Secret To Doing Crowdfunding Right

Phones have changed a lot in the last 10 years.

No, not those phones – headphones.

And specifically the type often referred to in the following statement: “Hey check out my new headphones – I got a totally awesome 50 percent off deal and only paid $150 for them.”

The person who heard that sentence today would ask which rapper had endorsed them; a decade ago the same person would have asked you if magic beans came with the headphones, or if an additional deposit of a cow was necessary for that upgrade.

Headphones have become a very big business in a very short time. Dr. Dre may be famous for being a co-creator of Gangster Rap, but he’s (almost) a billionaire because of headphones, specifically the $300-a-pop Beats line that he founded and went on to sell to Apple last year for $3.4 billion. As of 2014, Beats held almost 60 percent of the high-end headphone ($100 and up) market, and 27 percent of the general market.

“People thought we were crazy,” Beats by Dre CEO Luke Wood told Time of the conventional wisdom during their 2008 launch. “They said the marketplace would never support a $300 headphone.”

But Wood and Andre Young (AKA Dr. Dre) were crazy alright, crazy like a fox, because the high-end headphone market has exploded over the last several years.

While the $250 price tag was controversial when the product launched, now that’s considered on the reasonable end for high-quality “cans” that tend to run for $200-$400 a pop. And consumers frequently have more than one set — in fact, the average Beats owner has three sets.

According to retail analyst firm NPD Group, headphones that cost $100 or more saw sales revenue jump in the U.S. 73 percent between 2011 and 2012. The same group found that by 2014 the premium headphone market had officially crossed the billion-dollar mark.

Where there is an expansion of opportunities, there are entrepreneurs waiting to get in on them.

Meet Antonio Meze, founder of Meze Headphones. Meze has a fairly specific idea about the headphone marketplace, and that is that consumers like beauty as much as branding, and are willing to pay for it, too.

Meze’s signature product, the 99 Classics, is certainly striking in its appearance.

But more than pretty, they are also designed to be highly functional.

“The whole assembly is made to be fully serviceable,” Meze told PYMNTS in a recent interview. “Everything is tied together with torque screws so if a consumer finds a way to break it, they will always be able to maintain the headphones with spare parts.”

Consumers, he notes, are already spending a lot on headphones, because cheap headphones break pretty easily and need to be replaced. That’s inefficient for consumers, he noted, and bad for the planet at the same time.

“This is what environmentally friendly means — not that you make it out of wood and recycled cardboard and then throw it out and buy something new all the time. Instead it is about letting consumers buy a product that is built to last. Designing a long life span for any product is always more environmentally friendly.”

And Meze has thought more than the average person about product design. Before he was a discovered as an emerging headphone mogul, he was an award winning industrial designer who had worked on everything from kitchenware to consumer electronics. And with that background, he said, Meze headphones were different than those made by most small product-makers trying to make a name in an increasingly crowded field.

“A lot of companies do the PR work ahead of time to build a buzz. We didn’t go that way,” Meze noted.

Instead, they went to work on the design — and on making sure they had something that could get customers excited, and could be reasonably produced.

“What many young designers don’t know is that not every shape can be manufactured. You can create a great theoretical design on a page or in a computer program, but it will not be manufacturable,” Meze said. “You have to take into account the processes that come later, you have to respect the materials and design according to those limitations.”

[bctt tweet=”“What many young designers don’t know is that not every shape can be manufactured.” “]

And these considerations are especially important for firms choosing the same way to go as Meze did – by taking their product to crowdfunding site IndieGoGo to raise the funds necessary to begin producing.

“I think it is very important to know what you are doing. It is very appealing to go to crowdfunding with a mock-up or a prototype that doesn’t necessary function and then just put it out there,” Meze noted. “It might look good in picture or in video, but you find out it doesn’t work or it is not good on a production side, and suddenly you run into the delays.”

He said that is why so many crowdfunded projects — even those that get a solid vote of confidence from the crowd in the form of funding — don’t end up delivering.

“A lot of folks who turn to crowdfunding are often trying to make a start in a field, and that is a tough plan,” Meze said. “And even though they get funded, a lot of them don’t get to production, they don’t get to the market. Most people don’t have the experience to bring a product from concept to production and to a market.”

[bctt tweet=”Most people don’t have the experience to bring a product from concept to production and to a market.””]

So before Meze hit up the crowd, he made sure he had more than a neat looking prototype to bring along with him.

“The headphones concept is ready, the prototype is ready, but most important the tooling is ready,” he said. “So what you see in the picture is a pre-production sample which means it is out of the final tooling, but it was not produced in 10K units.”

And crowdfunding worked better than expected — “shockingly well,” he said — even with their small and unmarketed campaign. Within the first two days they had exceeded their fundraising goal, aided, Meze said, by the site’s tendency to help campaigns boost their momentum.

“Indiegogo has a feature called to “gogofactor” which puts your product on the first page if the momentum is good,” Meze explained. “When we had strong momentum on the first few days and they help you, if your campaign is going well, they boost it some more. We eventually made the Indiegogo newsletter, which helped even more.”

And now, with funds raised, Meze says the business is ready to go.

“The product is available in November so it is in there for the holiday,” he said.

And, he said, customers who bought their phones through the crowdfunding campaign will be receiving their headphones on time this fall.

As for what’s next, Meze says the company is now working on its next product design.

“We are also looking to launch our new line of headphones that is designed to be more portable, made from aluminum wood and leather,” he noted.


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