Kickstarter

History

Kickstarter launched on April 28, 2009, by Perry Chen, Yancey Strickler, and Charles Adler. The New York Times called Kickstarter "the people's NEA". Time named it one of the "Best Inventions of 2010" and "Best Websites of 2011". Kickstarter reportedly raised $10 million funding from backers including NYC-based venture firm Union Square Ventures and angel investors such as Jack Dorsey, Zach Klein and Caterina Fake. The company is based in the Greenpoint section of Brooklyn.

Andy Baio served as the site's CTO until November 2010, when he joined Expert Labs. Lance Ivy has been Lead Developer since the website launched. On February 14, 2013, Kickstarter released an iOS app called Kickstarter for the iPhone. The app is aimed at users who create and back projects and is the first time Kickstarter has had an official mobile presence.

On October 31, 2012, Kickstarter opened to projects based in the United Kingdom, followed by projects based in Canada on September 9, 2013, Australia and New Zealand on November 13, 2013, and Denmark, Ireland, Norway, and Sweden on September 15, 2014. and in Spain on May 19, 2015.

Model

Kickstarter is one of a number of crowdfunding platforms for gathering money from the public, which circumvents traditional avenues of investment. Project creators choose a deadline and a minimum funding goal. If the goal is not met by the deadline, no funds are collected (a kind of assurance contract). The platform is open to backers from anywhere in the world and to creators from the US, UK, Canada, Australia, New Zealand, The Netherlands, Denmark, Ireland, Norway, Sweden, Spain, France, Germany, Austria, Italy, Belgium, Luxembourg, Switzerland and Mexico.

Kickstarter applies a 5% fee on the total amount of the funds raised. Their payments processor applies an additional 3–5% fee. Unlike many forums for fundraising or investment, Kickstarter claims no ownership over the projects and the work they produce. The web pages of projects launched on the site are permanently archived and accessible to the public. After funding is completed, projects and uploaded media cannot be edited or removed from the site.

There is no guarantee that people who post projects on Kickstarter will deliver on their projects, use the money to implement their projects, or that the completed projects will meet backers' expectations. Kickstarter advises backers to use their own judgment on supporting a project. They also warn project leaders that they could be liable for legal damages from backers for failure to deliver on promises. Projects might also fail even after a successful fundraising campaign when creators underestimate the total costs required or technical difficulties to be overcome.

Asked what made Kickstarter different from other crowdfunding platforms, co-founder Perry Chen said: "I wonder if people really know what the definition of crowdfunding is. Or, if there’s even an agreed upon definition of what it is. We haven’t actively supported the use of the term because it can provoke more confusion. In our case, we focus on a middle ground between patronage and commerce. People are offering cool stuff and experiences in exchange for the support of their ideas. People are creating these mini-economies around their project ideas. So, you aren’t coming to the site to get something for nothing; you are trying to create value for the people who support you. We focus on creative projects—music, film, technology, art, design, food and publishing—and within the category of crowdfunding of the arts, we are probably ten times the size of all of the others combined."

Projects

On June 21, 2012, Kickstarter began publishing statistics on its projects. As of February 13, 2015, there were 207,135 launched projects (7,802 in progress), with a success rate of 40%. The total amount pledged was $1,523,718,656.

The business has grown quickly in its early years. In the year 2010, Kickstarter had 3,910 successful projects and $27,638,318 pledged. The corresponding figures for 2011 were 11,836 successfully funded projects and $99,344,381 pledged; and there were 18,109 successfully funded projects, $319,786,629 pledged in 2012.

February 9, 2012, saw a number of milestones set by Kickstarter. A dock made for the iPhone designed by Casey Hopkins became the first Kickstarter project to exceed one million dollars in pledges. A few hours later, a project by computer game developers Double Fine Productions to fund a new adventure game reached the same figure, having been launched less than 24 hours earlier, and finished with over $3 million pledged. This was also the first time Kickstarter raised over a million dollars in pledges in a single day. On August 30, 2014, the "Coolest Cooler", an icebox created by Ryan Grepper, became the most funded Kickstarter project in history, with US$13.28 million in funding, breaking the record previously held by the Pebble smart watch.

In July 2012, Wharton professor Ethan Mollick and Jeanne Pi conducted research into what contributes to a project’s success or failure on Kickstarter. Some key findings from the analysis were that increasing goal size is negatively associated with success, projects that are featured on the Kickstarter homepage have an 89% chance of being successful, compared to 30% without, and that for an average $10,000 project, a 30-day project has a 35% chance of success, while a 60-day project has a 29% chance of success, all other things being constant.

The ten largest Kickstarter projects by funds raised are listed below. Among successful projects, most raise between $1,000 and $9,999. These dollar amounts drop to less than half in the Design, Games, and Technology categories. However, the median amount raised for the latter two categories remains in the four-figure range. There is substantial variation in the success rate of projects falling under different categories. Over two thirds of completed dance projects have been successful. In contrast, fewer than 30% of completed fashion projects have reached their goal. Most failing projects fail to achieve 20% of their goals and this trend applies across all categories. Indeed, over 80% of projects that pass the 20% mark reach their goal.

Categories

Creators categorize their projects into one of 13 categories and 36 subcategories. They are: Art, Comics, Dance, Design, Fashion, Film and Video, Food, Games, Music, Photography, Publishing, Technology and Theater. Of these categories, Film & Video and Music are the largest categories and have raised the most amount of money. These categories, along with Games, account for over half the money raised. Video games and tabletop games alone account for more than $2 out of every $10 spent on Kickstarter.

Guidelines

To maintain its focus as a funding platform for creative projects, Kickstarter has outlined three guidelines for all project creators to follow: creators can fund projects only; projects must fit within one of the site's 13 creative categories; and creators must abide by the site's prohibited uses, which include charity and awareness campaigns. Kickstarter has additional requirements for hardware and product design projects. These include

The guidelines are designed to reinforce Kickstarter’s position that people are backing projects, not placing orders for a product. To underscore the notion that Kickstarter is a place in which creators and audiences make things together, creators across all categories are asked to describe the risks and challenges a project faces in producing it. This educates the public about the project goals and encourages contributions to the community.

Notable projects and creators

Several creative works have gone on to receive critical acclaim and accolades after being funded on Kickstarter. The documentary short "Sun Come Up" and documentary short "Incident in New Baghdad" were each nominated for an Academy Award; contemporary art projects "EyeWriter" and "Hip-Hop Word Count" were both chosen to exhibit in the Museum of Modern Art in 2011; filmmaker Matt Porterfield was selected to screen his film Putty Hill at the Whitney Biennial In 2012; author Rob Walker's Hypothetical Futures project exhibited at the 13th International Venice Architecture Biennale; musician Amanda Palmer's album "Theatre is Evil" debuted at No. 10 on the Billboard 200; designer Scott Wilson won a National Design Award from Smithsonian’s Cooper-Hewitt, National Design Museum following the success of his TikTok + LunaTik project; the Kickstarter funded GoldieBlox toy gained nationwide distribution in 2013; and approximately 10% of the films accepted into the Sundance, SXSW and Tribeca Film Festivals are projects funded on Kickstarter.

Numerous well-known creators have used Kickstarter to produce their work, including: musicians Jennifer Paige, Paula Cole, Amanda McBroom, De La Soul, Amanda Palmer, Daniel Johnston, Stuart Murdoch and Tom Rush; filmmakers and actors Kevin Sorbo, Alyson Hannigan, Zach Braff, Bret Easton Ellis, Colin Hanks, Ed Begley, Jr., Gary Hustwit, Hal Hartley, Jennie Livingston, Mark Duplass, Matthew Modine, Paul Schrader, Ricki Lake, Whoopi Goldberg, Kristen Bell, John de Lancie and Zana Briski; authors and writers Dan Harmon, Kevin Kelly, Neal Stephenson, Steve Altes, and Seth Godin; photographers Spencer Tunick, Shane Lavalette, and Gerd Ludwig; game developers Tim Schafer, Keiji Inafune, Brian Fargo, and Rand Miller; designer Stefan Sagmeister; animator John Kricfalusi; comedian Eugene Mirman; animators Don Bluth and Gary Goldman; entrepreneurs Tim Ferriss, Samuel Agboola and Craig Mod; and custom guitar maker Moniker.

The Glowing Plant project was the first and only Kickstarter project to fund the development of a genetically modified organism (GMO).

Project cancellations

Both Kickstarter and project creators have canceled projects that appeared to have been fraudulent. Questions were raised about the projects in internet communities related to the fields of the projects. The concerns raised were: apparent copying of graphics from other sources; unrealistic performance or price claims; and failure of project sponsors to deliver on prior Kickstarter projects.

A small list of canceled projects includes:

Controversies

In the Huffington Post article "Why Kickstarter is Corrupted" Nathan Resnick blames the rise of paid advertising, investor backed campaigns, and crowdfunding agencies for the decline of Kickstarter as a useful tool for small inventors and creators.

Resnick cites Nebia, backed by Tim Cook and Eric Schmidt, as an example of a well funded, investor backed, project using Kickstarter purely for publicity and thus drawing donations from smaller teams.

He goes on to note that the highest profile crowdfunding marketing agency, "Funded Today", charges a 35% commission on all monies raised, regardless of their contribution, while reserving the right to abandon projects they've pledged to support and claims such huge fees can make it impossible for successful projects to survive even if they hit their targets. Funded Today can collect as much as 50% of the total amount a campaign raised as fees, when the four-figure up-front charges they levy are accounted for.

Patent disputes