Each week, we seek expert advice to help a small or medium-sized business overcome a key issue.
Living in a high-rise building is common in many North American cities, though it certainly comes with its ups and downs.
For Yi Jiang, who moved into a Toronto tower seven years ago, trekking to the basement to do laundry was one such downside. "I had this really lousy laundry experience," he says.
The chore would lead Mr. Jiang to design a small, foot-powered washing machine for his industrial-design thesis project while he was a student at Toronto's OCAD University in 2013. The goal was to develop a kitchen or washroom solution to fit in a one-metre-square space.
While he admits that larger items of clothing such as jeans or jackets still need to be washed in a traditional machine, smaller, more common items such as T-shirts and underwear don't require such an energy-inefficient method. "For a really small load, do we really need electricity to generate the power?" he says. "That's how the foot pedal idea came up."
Mr. Jiang's invention is portable and good for students, boaters, RV trailer enthusiasts and cottages. It requires no electricity and emits zero carbon emissions.
Working out of OCAD's Imagination Catalyst incubator, Mr. Jiang founded YiREGO Corp. and launched his machine, called the Drumi, at Toronto's Green Living Show in March this year, where it was a big hit.
The Drumi, which stands 55 centimetres tall and weighs about six kilograms, holds up to 2.2 kilograms of clothing. The user adds five litres of water and detergent and pumps the pedal for a few minutes, then presses a button to drain the dirty water. More clean water rinses the clothes.
In July the Drumi won a James Dyson Award for its design and environmental impact.
"There's actually one guy in Australia who is building a mobile home out of a bus and he wanted the exact dimensions so he could have a little spot for the Drumi," says Megan Savage, a YiREGO spokeswoman. The company has also targeted the developing world.
Demand for the Drumi, which is manufactured in Shenzhen, China, has surpassed the company's annual sales projections of between 800 and 1,000 units. The price has been raised to $299 (U.S.) from $169.
But a lack of cash forced YiREGO to cap the first production run at 1,300. Those units will be delivered to customers next summer.
While the company has benefited from an angel investor, it has just launched a campaign on the crowdfunding site Indiegogo and raised 46 per cent of its $100,000 goal in the first week.
The Challenge: Is crowdfunding the best way to raise money, and how can YiREGO build on its early success?
THE EXPERTS WEIGH IN
Lance Laking, investment director, MaRS Investment Accelerator Fund, Ottawa
The whole crowdfunding movement has been tremendously successful, but there's just so much stuff on the Kickstarters and Indiegogos of the world. How do you climb up out of the weeds and get some visibility?
The companies that have been successful on these platforms have also done a tremendous amount of work alongside the campaign to sell their stuff. So it's really important for YiREGO to keep building its brand and to have a strong social outreach that helps to spur the activity at Indiegogo or Kickstarter.
You also have to be really careful what you set as your goal. If you're too optimistic and you don't hit it, you can get stalled and end up looking like the product's not successful – you didn't hit your goal, so it must be a lousy product. You're probably better off setting a goal that's quite achievable and nail it and the get all of the publicity from that.
When it comes to the James Dyson Award, people associate it with sort of a high-end, cool, innovative product, so having that tag beside it and that credential is a really good thing.
Kwan Song, partner, knowledge-based industries, Ernst & Young, Toronto
A startup trying to raise money should look under every rock that they can. Too many times I see early-stage companies trying to go directly to the venture capitalists, but they don't want anything to do with companies at that stage.
As for marketing, I'd look at any emerging market, like Third World-type countries. This product is a very cost-effective way of addressing a problem in those nations. Take that massive earthquake in Haiti five years ago. To have products like this readily available, it doesn't solve all the problems but it makes life a little bit more manageable for people. I see quite a bit of potential in any of the African or Asian nations where space is something they don't have.
Geoff Tait, founder and president, Triple Bogey Brewing & Golf Co., which makes beer aimed at golf and curling fans, Toronto
Don't give away too much of the business too quickly to venture capital investors. We all think we need to grow really fast, but I learned that in my other businesses, all of a sudden I ended up owning a quarter of the company and having zero control and doing all the work. If you can grow a business at a slower pace but still sustain it, and make a few bucks along the way, it's a much better way than giving away the farm right out of the gate because you think you need all that money.
Also, find the right partners. I went to friends of mine in the curling business and they actually put money into the company. The key to the whole thing is to make sure you've got the right guys with you.
THREE THINGS THE COMPANY COULD DO NOW
Get financing in place
Understand what capital needs are first and foremost, then get as close to that as possible before taking on orders.
Double down on target niches
Focus on two or three niches and target all the marketing and social messaging at those.
Grow at your own pace
Consider all options before giving away equity, or find partners that have a track record of success in your business.
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Interviews have been edited and condensed.