Kickstarter: D.I.Y. fundraising in the social network age
Kai Ryssdal: Used to be that if you had an idea, something you wanted to make or a project you wanted to get done, you had to go see people, people with money — venture capitalists or angel investors.
Now you just go online. Today for the latest installment of our series Conversations from the Corner Office, we go to a converted three-floor walkup on the Lower East Side of Manhattan. The offices of Kickstarter, the new-new thing in crowdsourced funding. You pitch your idea, they put it on their website, and if all goes well, the Internet chips in to get you the money you need.
Sounds kinda simple, so the first thing I asked co-founder Yancey Strickler was even though they’re still in that startup mindset, working really hard, is what Kickstarter does every day hard work?
Yancey Strickler: It doesn’t feel like work very often. And there’s 37 people who work at Kickstarter right now. It’s a great environment. It really does not feel like work very often.
Ryssdal: As you grow, how confident are you that you can maintain that feeling that you have here now, of being 37 people in a place in Lower Manhattan, doing this thing that you’re all really passionate about?
Strickler: It’s definitely going to be a challenge. You know, we’re not interested in having a really huge team; we’d like to stay as small as we can. If a project is successfully funded, we charge 5 percent of what they raise as our fee. And based on that, we’re able to have 37 employees; we’re able to grow; people have health insurance; our offices are pretty nice, you know?
Ryssdal: That’s no small thing, right?
Strickler: It is no small thing. It is no small thing. There’s no advertising on Kickstarter. There’s no corporate matching of projects. There’s none of those kinds of things. Certainly there are many opportunities to do things like that, but to us they are obviously wrong because they don’t fit with what our notion of what Kickstarter is.
Ryssdal: You started with an emphasis on filmmakers and artists and projects along those lines. You now have entrepreneurs and people with actual business propositions and products. The most well-known one probably recently is this Pebble smart watch — it’s got $6-point-something million worth of Kickstarter funding, it syncs with your phone and does all this kind of stuff. Are you guys now venturing into the world of venture capitalists? Is that what’s happening?
Strickler: No, not at all. The line between a project and a business can be a fuzzy one. So a good example would be the product design kind of things. When those were first coming to us, and the real first one of those was a project called the Glif, which is a tripod for an iPhone 4 — and our concerns were just this doesn’t exactly feel like Kickstarter. It’s making an iPhone accessory — does that really feel right? But as we thought about it more and more, I think the notion hit us that creativity can be plotted in a number of different ways. So if you look around the site, you’ll see a huge variety of things that cover almost anything imaginable. But there’s some kernel, there’s some desire to create and make that is constant in all of them.
Ryssdal: Do you remember the first project Kickstarter ever got?
Strickler: Yeah. The first project ever was launched by Perry, actually.
Ryssdal: One of the co-founders?
Strickler: One of the co-founders, our CEO. I actually can’t say the name of it on the air — it was a T-shirt that on it had a stencil that said “Grace Jones does not give a ****.” We can bleep that out I guess. The project was unsuccessful.
Ryssdal: Oh, it didn’t fund, really? Oh that’s great.
Strickler: It didn’t fund. But the first one to actually be funded was called Drawing for Dollars, and it was six days in to Kickstarter successful, and it raised $35 from three people.
Ryssdal: Do you remember the first million-dollar project?
Strickler: The first million-dollar project was just about 10 weeks ago, by a guy named Casey from Seattle, and it’s an iPhone dock.
Ryssdal: Oh right, yeah, I saw this one. It was fresh materials?
Strickler: Yeah. So it raised a million dollars. He was trying to raise $75,000 — he ended up raising about $1.5 million. But the really crazy thing was the day his project crossed into the million dollars, another project did it four hours later. And that project had launched the day before.
Ryssdal: Dude, really? Critical mass, right? I mean, come on.
Strickler: Yeah, it was a really, really crazy day.
Ryssdal: I imagine you have already been approached by larger companies, by investors, by people who want a piece of you. Obviously, you’ve said no, but will there come a point when you say, ‘yeah, now’s the time for us to get out of this’?
Strickler: No. There’s no interest in that whatsoever.
Ryssdal: Thoughts of an IPO, of taking it public?
Strickler: No. It’s not like that. We’re not thinking about those kinds of things.
Ryssdal: We are, what, a mile or something from Wall Street? Plus or minus, from the cutthroat, rip-your-eyeballs-out heart of American capitalism. How do you guys fit into that equation? Because you wouldn’t think of it as being connected, but you are.
Strickler: You know, I think that there is something to having a diversity of funding options in the world. The past 100 years have been one that has been dominated by corporations and investment. But the truth is that investment model leaves a lot of things out. One of the notions behind Kickstarter is that if you change the question behind funding from ‘Will this make money?’ to just ‘Do I want this to happen?’ — a lot more things become possible. There’s a lot about Kickstarter that is very similar to patronage, and that is a model that is a meshing of patronage and commerce. Old forms of patronage were about the elite being able to just incentivize people to create the art that they wanted. And now you have anyone, anyone can be a patron of the arts. Anyone in the world.
Ryssdal: Yancey Strickler, thanks a lot for your time.
Strickler: Thanks for having me.
Ryssdal: There’s more here — an audio tour of Kickstarter memorabilia, Yancey walking me through projects funded through the site.
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.
