Today I’ve got an exclusive new interview with a startup founder for you.
The company is Magic Instruments (MI), and the founder and CEO is Brian Fan.
MI is making a new class of musical instruments, starting with the guitar.
The company is currently raising money on Wefunder here, for those who are interested.
You can learn more about Brian and the opportunity to invest in his company there.
Let’s get started…
Adam: What is MI Guitar?
Brian: The MI Guitar is a guitar that uses technology and software to democratize playing and learning guitar.
The MI Guitar enables people to start playing their favorite songs right away. We do this by enabling people to play entire chords with a single finger, and our mobile app has a large song catalog and easy playing instructions for each song. So even people with no musical background, including kids, can pick up our guitar and start playing their favorite songs right away.
The MI Guitar also enables people to learn to play the traditional guitar in a more enjoyable and fun way by enabling people to start playing songs on day one while learning traditional guitar chord fingerings.
Technology has made so many aspects of our lives so much easier, such as taking photos. Forty years ago, photography was very complex and technical, and only a few people had the training, knowledge and equipment to be a photographer. You had to understand exposure, color balance and focus, and you had to learn darkroom techniques.
Technology has made photography so easy and accessible that in the past year, more people shared photos on Facebook and Instagram than were taken in the entire history of analog photography. Technology democratized photography, and as a result, everyone can be a photographer.
Today, almost everyone wishes they could play an instrument, yet 90% of people learning guitar quit in the first year. We believe we can use technology to simplify playing and learning guitar, and in doing so, make it possible for many more people to participate.
We have tested our guitar on more than 1,500 users, and we love seeing the surprise and smiles on people’s faces when they realize they are actually playing the song they want to play, and it sounds right.
Adam: How do you plan to market the MI Guitar?
Brian: We plan on marketing through a combination of online advertising, user-generated content shared through social media, PR, influencer endorsement, and in-person demos/promotion at summer music festivals.
Our main focus will be online advertising, through Facebook, Google search and YouTube ads, as this is the most efficient way to reach a broad audience of new customers. We are also building features that enable our users and customers to video and share their playing via social media.
Initially, we will sell the guitar on the Magic Instruments website, as well as through Amazon. Over time, we will look for distribution in traditional retailers. But we want to take things step by step, as retail is unforgiving, and you only get one shot to be successful with a major retailer.
Adam: Tell me about the manufacturing process for a unique new product like this.
Brian: The manufacturing process for this product is straightforward and comparable to other large form-factor consumer electronics audio products. The exterior of the guitar is injection-molded plastic, and the internals consist of various PCBs, electronics and audio components. The parts have to go through final assembly, including packaging.
We’ve met with a number of potential manufacturing partners and have narrowed the field down to two leading candidates, both of which are based in Asia.
We considered manufacturing in the U.S., but we didn’t find any manufacturers that had the technical capabilities, supply chain and cost structure that would enable us to price our guitars at an affordable level.
Fortunately for us, our product isn’t pushing any boundaries in terms of manufacturing or supply chain, unlike some other hardware products like wearables, which have to be very small, water- resistant and not cause any problems while being worn against the skin. That being said, manufacturing is never easy and requires a lot of attention to detail.
Adam: This is your second time raising money online. Do you see equity crowdfunding (accredited and non-accredited) becoming an important part of the startup ecosystem?
Brian: We believe equity crowdfunding will eventually become an important part of the startup ecosystem, but it will take a few years and a number of success stories to build awareness and interest. Equity crowdfunding has only been possible for around seven months, given that the SEC finalized its regulations in May 2016.
If you look at product crowdfunding, it took Kickstarter a few years to become widely known. We think equity crowdfunding will get there, but there needs to be a lot more media coverage, newsletters (like yours) and other content around equity crowdfunding to raise awareness amongst non-accredited investors.
Adam: Why did you choose to raise money online, outside of traditional channels?
Brian: We chose to raise money online as we want our customers and supporters to have an opportunity to be co-owners of our business. The philosophy of our business is to make something that only a few people can do be accessible to everyone. So giving our fans the ability to be co-owners of our business fits in with our mission.
That being said, we are also raising money from traditional sources (angels and VCs) as well, as these investors bring additional capabilities and value to us.
Adam: How do newer Y Combinator companies view online fundraising? Has perception changed – is it a “normal” part of fundraising now?
Brian: While I don’t have any quantitative statistics, anecdotally, we’ve heard that newer YC companies increasingly view online fundraising as a viable channel.
Most YC hardware startups in recent classes have been advised to run product crowdfunding campaigns on Kickstarter or Indiegogo, as this provides customer feedback and evidence of market traction prior to a full product launch.
Regulation crowdfunding, on the other hand, is such a new phenomenon that I think many YC companies are still trying to figure out the pros and cons, so the jury is still out.
If startups hear of other startups running successful regulation crowdfunding campaigns, I think the perception will shift. But today, startups aren’t sure whether the benefits of equity crowdfunding are worth the effort to run a campaign and comply with regulatory obligations.
Adam: Do you plan to expand into other instruments after MI Guitar?
Brian: Yes. We believe the principles of how we made the guitar so easy to play and learn are applicable to many other instruments, and we can leverage much of the technology stack we’ve built for the guitar in other instruments. For now, though, our focus is solely on the guitar and doing everything we can to make it a big success.
Adam: You’ve attracted a number of notable investors, including Matt Bellamy of Muse. How did this come about?
Brian: We were lucky enough to meet Matt Bellamy at an investor reception in Hollywood, where he saw a good friend of his pick up our prototype guitar and start playing a Beatles song within minutes. Matt was impressed by how accessible our product was to his friend, who doesn’t play guitar, and based on the strength of our product demo, decided to invest in us.
Thanks to Brian for taking the time! Be sure to check out the Magic Instruments site and its campaign on Wefunder.
Founder, Early Investing