I'd made 70 grand as a construction engineer and then all of a sudden I had hundreds of thousands of dollars and great margins.
Peak Design runs some of the most successful crowdfunding campaigns in the world. They've raised over 60 million on Kickstarter. It became the number two most funded Kickstarter of all time at the time. The brand is known for their bold designs and innate attention to detail, and this year the team will surpass the 100 million mark in annual revenue. Harrison Ford now has walked into our Peak Design store in Venice Beach three times. Founder Peter Dering continues to push the boundary on what your bags and camera gear can do in addition to leading the charge with his initiative, the Change Climate Project. Hey there, I'm your host, Adam Leiter, and this is Shopify Masters, your companion for starting and scaling a business. Peter, thanks so much for being here.
Thanks, Adam. Pumped to be here, man.
How do you explain the business to a lay person or to your mom?
It's getting harder and harder every year as we continue to branch out. We started as a photographic accessories designer and maker. We're still that, but we've expanded a lot. We got into bags in 2015 and now we make both bags for photographers and for non-photographers. The theme that ties them together is feature-rich but elegant in their aesthetic and a minimalist-looking aesthetic but really technical, extremely thoughtful in the details. We have a whole another line of products that surrounds mobile phones because phones became very competent cameras kind of in the mid-2010s. It was incumbent upon us to be the best camera accessory maker out there. To my eye, that meant we had to make mobile phone accessories. So we have a whole suite that kind of crosses over into more lifestyle products as well. That's kind of where we're situated today.
Where does the passion for design come from?
I guess I was kind of born with it. When I got asked that question, 'What do you want to be when you grow up?', I always said I want to be an inventor. For me, it was more about that mechanism, design, and function that really drove me. As far as aesthetics go, I think I developed that sense perhaps over time and, thank goodness, surrounded myself with people who also have a real keen aesthetic sense. So you combine those two things and I suppose you get Peak Design.
Pre-Peak Design you were a construction engineer.
I was. I studied civil in school. I wanted to be an inventor. It's funny that I didn't go the mechanical engineering route. When I was at school, I got a little bit whelmed by the idea of what it would be like to construct bridges and skyscrapers. So I chased that passion for a while and I actually had a blast doing it. I have so much respect for construction, for the built world. It's a massive part of the economy. The reason I pivoted back toward the original passion, invention, was because I wanted to work for myself. I didn't want to go the contractor route. It's a low-margin business, it's terrible hours, it's really hard, and it doesn't quite allow for the creativity that I wanted to bring into my career.
Post construction engineering, you take a year off, you travel the world and the idea for Peak Design starts to percolate or?
Almost. I actually was so bold as to ask for a leave of absence after 19 months in the construction field and they said 'You want to do what?'. It's not very progressive, but I did anyways. They did let me go and I went back to work for them after that. I spent 4 months traveling Southeast Asia and India mostly on motorcycle and just finding my way. That spawned an incredible breadth of things I wanted to do in this world. Many of those things would eventually become Peak Design.
Your passion for entrepreneurship, where does it come from?
I think it might actually come from my dad. He was not an entrepreneur; he was a firefighter. The reason I say that is because my dad has always been very independent, kind of fiercely independent, and I think that is what drives entrepreneurship in me. I always wanted to be my own boss. When I was traveling for 4 months, I was my own boss, I was in charge of my own time, and I really feel like there's not much more that feels freeing than that feeling of being in charge of one's own time. More than anything else, that's what I just wanted.
So when you got back from that trip, did you say to yourself, 'I want to create a product business that lives on the web'? Did you say to yourself, 'I want to become this sort of multi-channel brand at some point'? Did you have any overarching goals?
It was naive or honest, I'm not sure which, but I wanted to invent a product that would help solve some of our energy concerns. I actually created a provisional patent for a system that captured energy from trains. It was a naive idea, but I had other ideas: a tripod that would collapse onto itself and this camera clip. I pursued the train idea for about a year while still working construction before it was apparent it was much too difficult. So I fell back on the idea of a clip that would allow me to carry my camera on my backpack strap hands-free and rigidly supported. I was solving a very specific need I encountered while traveling. Did I think about a go-to-market strategy? A web store? Hell no. I thought simply this is a mechanism that if I made it and did a good job, I could sell it. No consideration of where I might sell it.
Got it. But Kickstarter plays a major role.
Right. And it has throughout the history of the company. You've raised over 60 million on Kickstarter to date. Your most recent Kickstarter, I think, generated north of 13 million. It's incredible. I think Peak is actually one of the most successful Kickstarter consumer brands ever. Your very first Kickstarter campaign, was it a surprise to you that it was a success?
It was definitely a delight. Kickstarter came on my radar. I had already quit my construction job and was a year into making this thing. It was January 2011 and I had tooling being cut overseas. I heard of Kickstarter, checked it out, and said 'This is perfect.' It was unbelievable dumb luck that the timing converged. Looking at other projects, I felt my product was completely novel, solved an obvious problem, and the type of people on Kickstarter would love it. So I was actually really confident it would succeed. And it crushed it. It became the number two most funded Kickstarter of all time at the time. I can't tell you what that felt like: 5,258 units and $365,000. I'd made 70 grand as a construction engineer, and then all of a sudden I had hundreds of thousands of dollars and great margins. My net profit that first year was around 30% on $700,000 in sales. I was just off to the races.
Yeah. And the company's north of 100 million in topline revenue.
Yeah. Finally, we finally crested that nine-figure beast and we're very proud to have done that this year. I think the products we've made would have been successful outside of it, but the brand we've created is so deeply intertwined with crowdfunding and the expectation that Peak Design is going to show up with innovative products and deliver. Not quite on time, we rarely did, but pretty damn close. And when we have delays, we are extremely open and transparent with our customers. So it's a massive part of how we've grown and how we've gotten here.
So, do you see Kickstarter as the main contributor to that growth? Is it really one of the fundamental building blocks of Peak Design?
I think that the products we've made would have been successful outside of it, but the brand we've created is so deeply intertwined with crowdfunding and the expectation that Peak Design is going to show up with innovative products and deliver. Not quite on time, we rarely did, but pretty damn close. And certainly when we have delays and things like that, we are extremely open and transparent with our customers about it. So it's a massive part of how we've grown and how we've gotten here.
For founders that have not ventured onto Kickstarter or Indiegogo or these platforms, you're a veteran at this point. What are the pillars of a successful Kickstarter campaign? Can you point to a few things?
I want to be clear, a Kickstarter is really a go-to-market plan, a sales channel. It is not a place to test out ideas and say, 'I wonder if people will like this.' The same things that garner success in any other sales channel will work here. The unique things with Kickstarter are number one, you're getting the money up front, which is extremely beneficial to cash flow. It has allowed Peak Design to stay completely investor-free 15 years in. In exchange, you're giving backers a significant discount at the beginning of a product life cycle, which is almost unheard of. We're exchanging discount for bringing that revenue forward and creating more momentum. There is a give and take and we've never run a business any other way. We've launched our significant products on Kickstarter and that's how we've done it.
Do you think Kickstarter is an effective marketing channel beyond simply being a sales channel? The reason I ask the question is because those consumers, they're early adopters. They're buying in for a discount or belief in the product or whatever. They can effectively become marketing organisms themselves and start to spread word of mouth. Do you see it that way?
Oh, definitely. Kickstarter's number of people backing projects has somewhat plateaued because they were so successful at getting their brand out. But this is a very engaged community. There's a huge overlap between the types of people who show up on our Reddit sub. It's a type of consumer that cares so much more than your average Amazon buyer. It has fostered an awesome community for us.
