Stuart Lee is launching a new pedal-style kayak business and funding initial production through one of the most successful Indiegogo crowdfunding campaigns in Minnesota.
Now Stuart Lee has started a company of his own, Lightning Kayaks, to build and sell the Strike — a pedal-drive kayak primarily for fishing and sightseeing. The foot-powered pedals move two fins rather than a propeller for primary propulsion.
So why would Lee, a paddle maker, want to build a kayak that primarily utilizes your legs instead of your arms?
“You have to adapt,” Lee said. “Its easy to feel competition from Asia encroaching on our paddle business.”
He also thinks the new kayak can help the existing businesses. “We hope to open doors that haven’t been open before, and increase paddle sales,” Lee said.
Pedal-style kayaks have been around for awhile, but they have been gaining in popularity, mainly from the growing ranks of kayak fisherman. Having hands free to cast and land fish from a kayak is easier.
Lee is sold on the pedal-style kayaks because it’s easy to learn how to use them, utilize bigger muscle groups than traditional kayaks, and are less tiring because of that and don’t require perfect form.
“We try to make things that people have fun using,” Lee said.
Through the crowdfunding campaign, Lee has essentially presold 70 kayaks and raised more than $126,000. The campaign ended last week, but because of its popularity, Lee extended it for another week. Some investors have contributed as much as $2,750 for the various options offered.
Indiegogo said it has had more than 650,000 campaigns raise a total of $1.68 billion since it was founded in 2008. However, less than 1 percent of campaigns on the Indiegogo crowdfunding platform raise more than $100,000.
Crowdfunding, on sites such as Indiegogo, Kickstarter and GoFundMe, is a way for entrepreneurs to extend beyond the friends and family network to a broader audience of potential investors.
With Kickstarter and Indiegogo, investors get a product or a service in exchange for the investment, said Zach Robins, a partner in the Minneapolis office of Messerli Kramer, who advises clients on raising capital. Robins said the sweet spot on reward-based crowdfunding options are investments of $50 to $500 and campaigns that raise $1,000 to $50,000.
“They can be a really successful way to presell a product,” Robins said. “And they can use those funds to manufacture it, design it and patent it if need be — and take care of all the other business aspects.”
Another emerging option in Minnesota and other states is investment crowdfunding, also known as Regulation CF.
“In the world of investment crowdfunding, it’s a very different scale,” Robins said, with individuals typically contributing $500 or more. “That’s because the contributors are not investing solely to get a product or service, they are investing because they believe in the company and they think there is going to be a return of their capital.
Minnesota has had 12 Reg CF campaigns since May 2016 that received total commitments of $741,686. But only two of those 12 campaigns were fully funded and raised $351,475, according to Denver-based Crowdfund Capital Advisors, a firm that aggregates data on Reg CF.
Indiegogo said its campaigns in Minnesota have raised more than $20 million on the platform since 2008.
Although not in Minnesota, Indiegogo also has had successful kayak campaigns in the past.
Oru Kayak of Emeryville, Calif., raised $500,000, and Trak Kayak in Alberta, Canada, raised $825,000, according to the Indiegogo site. Both Trak and Oru kayaks are full-sized portable touring kayaks. The Oru kayaks go together much like folded origami, and Trak kayaks go together similar to a tent. Each use traditional paddles.
Lee got the crowdfunding idea after meeting the owner of Oru at a trade show. At that time, he already had his eye on developing a pedal-driven product and entering a different part of the kayak market than Accent and Cannon Paddles.
Lee recruited kayak and watercraft experts to help with the design and production of a pedal-drive kayak that was more affordable than competitors already in the field.
Among the experts: Lee Bonfiglio, a world-class kayaker who already had worked with Lee on designing Accent paddles. He led research and design.
Robert Field — a kayak angler and YouTube star who gave up his 9-to-5 job to tour the country and document his kayak fishing adventures — gave valuable input on essential features for anglers and helped produce the video for the Indiegogo page, Lee said.
The rotomolded kayak shells are being produced in Winona, Minn., by Wenonah Canoes. Final assembly is being done in Lightning Kayaks’ space in Minneapolis.
Lee’s ambitions for the Indiegogo campaign were modest, but he has been blown away by the results.
“We looked at it as 30 some days of advertising as well as creating brand awareness,” Lee said. Now he’s checking the site multiple times of day to see the progress.
Lee and his team are now working through challenges such as figuring out how to ship the new kayaks. The logistics are much more complicated and expensive than with paddles.
The first Strikes will ship in February, but Lee already is looking ahead to more versions. He wants to experiment with color to appeal to recreational and sightseeing kayakers and also develop a smaller version that could sell for less than $1,000.