Kickstarter

Last updated
Kickstarter, PBC
Kickstarter logo 2017.svg
Screenshot
Kickstarter screenshot.jpg
Type of business Public-benefit corporation
Type of site
Crowdfunding
Headquarters
Founder(s) Perry Chen
Yancey Strickler
Charles Adler
Industry Financial services
Internet
Website kickstarter.com
Alexa rankIncrease2.svg 614 (May 2018) [1]
LaunchedApril 28, 2009;9 years ago (2009-04-28)

Kickstarter is an American public-benefit corporation [2] based in Brooklyn, New York, that maintains a global crowdfunding platform focused on creativity and merchandising. [3] The company's stated mission is to "help bring creative projects to life". [4] Kickstarter has reportedly received more than $4 billion in pledges from 15.5 million backers to fund 257,000 creative projects, such as films, music, stage shows, comics, journalism, video games, technology and food-related projects. [5]

Public-benefit corporations are a specific type of corporation that allow for public benefit to be a charter purpose in addition to the traditional corporate goal of maximizing profit for shareholders. Depending on the country they may also be known as crown corporations, statutory corporations, or government owned corporations having monopoly over a specific service or market..

Brooklyn Borough in New York City and county in New York state, United States

Brooklyn is the most populous borough of New York City, with an estimated 2,648,771 residents in 2017. Named after the Dutch village of Breukelen, it borders the borough of Queens at the western end of Long Island. Brooklyn has several bridge and tunnel connections to the borough of Manhattan across the East River, and the Verrazzano-Narrows Bridge connects Staten Island. Since 1896, Brooklyn has been coterminous with Kings County, the most populous county in the U.S. state of New York and the second-most densely populated county in the United States, after New York County.

New York (state) State of the United States of America

New York is a state in the Northeastern United States. New York was one of the original Thirteen Colonies that formed the United States. With an estimated 19.54 million residents in 2018, it is the fourth most populous state. To distinguish the state from the city in the state with the same name, it is sometimes called New York State.

Contents

People who back Kickstarter projects are offered tangible rewards or experiences in exchange for their pledges. [6] This model traces its roots to subscription model of arts patronage, where artists would go directly to their audiences to fund their work. [7]

History

Kickstarter HQ library, Brooklyn Editing at Kickstarter 2017-03 jeh.jpg
Kickstarter HQ library, Brooklyn

Kickstarter launched on April 28, 2009, [8] by Perry Chen, Yancey Strickler, and Charles Adler. The New York Times called Kickstarter "the people's NEA". [9] Time named it one of the "Best Inventions of 2010" [10] and "Best Websites of 2011". [11] 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. [12] The company is based in Greenpoint, Brooklyn. [13]

Perry Chen American Internet entrepreneur

Perry Chen is an American artist and entrepreneur best known for being the creator and principal founder of Kickstarter, the online funding platform for creative projects. He came up with the idea for Kickstarter in 2001 and launched it in 2009 along with co-founders Charles Adler and Yancey Strickler.

<i>The New York Times</i> Daily broadsheet newspaper based in New York City

The New York Times is an American newspaper based in New York City with worldwide influence and readership. Founded in 1851, the paper has won 125 Pulitzer Prizes, more than any other newspaper. The Times is ranked 17th in the world by circulation and 2nd in the U.S.

National Endowment for the Arts

The National Endowment for the Arts (NEA) is an independent agency of the United States federal government that offers support and funding for projects exhibiting artistic excellence. It was created by an act of the U.S. Congress in 1965 as an independent agency of the federal government. The NEA has its offices in Washington, D.C. It was awarded Tony Honors for Excellence in Theatre in 1995, as well as the Special Tony Award in 2016.

Andy Baio served as the site's CTO until November 2010, when he joined Expert Labs. [14] Lance Ivy has been Lead Developer since the website launched. [15] On February 14, 2013, Kickstarter released an iOS app called Kickstarter for the iPhone. [16] The app was aimed at users who create and back projects and was the first time Kickstarter had an official mobile presence. [17]

Andy Baio American blogger

Andy Baio is an American technologist and blogger. He is the co-founder of the XOXO Festival, founder of Upcoming.org, a former CTO of Kickstarter and the author of the Waxy.org blog. In 2018, Baio was named a Kickstarter Fellow.

Expert Labs is a non-profit technology incubator intended to aid government access expertise from interested members of the public. Part of the American Association for the Advancement of Science, it was formed in November 2009, following discussions with the White House Office of Science & Technology Policy. Expert Labs is directed by longtime blogger and technology evangelist Anil Dash. Initial funding of US$500,000 is from the MacArthur Foundation.

iOS mobile operating system by Apple

iOS is a mobile operating system created and developed by Apple Inc. exclusively for its hardware. It is the operating system that presently powers many of the company's mobile devices, including the iPhone, iPad, and iPod Touch. It is the second most popular mobile operating system globally after Android.

On October 31, 2012, Kickstarter opened projects based in the United Kingdom, [18] followed by projects based in Canada on September 9, 2013, [19] Australia and New Zealand on November 13, 2013, [20] the Netherlands on April 28, 2014, Denmark, Ireland, Norway, and Sweden on September 15, 2014, [21] Germany on April 28, 2015, France and Spain on May 19, 2015, [22] Austria, Belgium, Italy, Luxembourg and Switzerland on June 16, 2015, Singapore and Hong Kong on August 30, 2016, [23] Mexico on November 15, 2016 and Japan on September 12, 2017. In July 2017, Strickler announced his resignation. [24]

United Kingdom Country in Europe

The United Kingdom, officially the United Kingdom of Great Britain and Northern Ireland but more commonly known as the UK or Britain, is a sovereign country lying off the north-western coast of the European mainland. The United Kingdom includes the island of Great Britain, the north-eastern part of the island of Ireland and many smaller islands. Northern Ireland is the only part of the United Kingdom that shares a land border with another sovereign state‍—‌the Republic of Ireland. Apart from this land border, the United Kingdom is surrounded by the Atlantic Ocean, with the North Sea to the east, the English Channel to the south and the Celtic Sea to the south-west, giving it the 12th-longest coastline in the world. The Irish Sea lies between Great Britain and Ireland. With an area of 242,500 square kilometres (93,600 sq mi), the United Kingdom is the 78th-largest sovereign state in the world. It is also the 22nd-most populous country, with an estimated 66.0 million inhabitants in 2017.

Canada Country in North America

Canada is a country in the northern part of North America. Its ten provinces and three territories extend from the Atlantic to the Pacific and northward into the Arctic Ocean, covering 9.98 million square kilometres, making it the world's second-largest country by total area. Canada's southern border with the United States is the world's longest bi-national land border. Its capital is Ottawa, and its three largest metropolitan areas are Toronto, Montreal, and Vancouver. As a whole, Canada is sparsely populated, the majority of its land area being dominated by forest and tundra. Consequently, its population is highly urbanized, with over 80 percent of its inhabitants concentrated in large and medium-sized cities, many near the southern border. Canada's climate varies widely across its vast area, ranging from arctic weather in the north, to hot summers in the southern regions, with four distinct seasons.

Denmark Sovereign state and Scandinavian country in northern Europe

Denmark, officially the Kingdom of Denmark, is a Nordic country and the southernmost of the Scandinavian nations. Denmark lies southwest of Sweden and south of Norway, and is bordered to the south by Germany. The Kingdom of Denmark also comprises two autonomous constituent countries in the North Atlantic Ocean: the Faroe Islands and Greenland. Denmark proper consists of a peninsula, Jutland, and an archipelago of 443 named islands, with the largest being Zealand, Funen and the North Jutlandic Island. The islands are characterised by flat, arable land and sandy coasts, low elevation and a temperate climate. Denmark has a total area of 42,924 km2 (16,573 sq mi), land area of 42,394 km2 (16,368 sq mi), and the total area including Greenland and the Faroe Islands is 2,210,579 km2 (853,509 sq mi), and a population of 5.8 million.

Model

Kickstarter is one of a number of crowdfunding platforms for gathering money from the public, which circumvents traditional avenues of investment. [25] [26] 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). [27]

Crowdfunding is the practice of funding a project or venture by raising small amounts of money from a large number of people, typically via the Internet. Crowdfunding is a form of crowdsourcing and alternative finance. In 2015, over US$34 billion was raised worldwide by crowdfunding.

An assurance contract, also known as a provision point mechanism, or crowdaction, is a game theoretic mechanism and a financial technology that facilitates the voluntary creation of public goods and club goods in the face of collective action problems such as the free rider problem.

The kickstarter platform is open to backers from anywhere in the world and to creators from the many countries like the US, UK, [28] Canada, [29] Australia, New Zealand, [20] 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. [30] Their payments processor applies an additional 3–5% fee. [31] 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. [32]

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. [33] Projects might also fail even after a successful fundraising campaign when creators underestimate the total costs required or technical difficulties to be overcome. [34] [35]

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." [36]

Projects

On June 21, 2012, Kickstarter began publishing statistics on its projects. [37] As of February 13, 2015, there were 207,135 launched projects (7,802 in progress), with a success rate of 40%.[ clarification needed ] The total amount pledged was $1,523,718,656. [38]

The business grew quickly in its early years. In 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. [39] [40]

On February 9, 2012, Kickstarter hit a number of milestones. 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 new adventure game project started by computer game developers, Double Fine Productions, reached the same figure, having been launched less than 24 hours earlier, and finished with over $3 million pledged. [41] This was also the first time Kickstarter raised over a million dollars in pledges in a single day. [42] 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. [43]

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. [44]

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. [38]

Categories

Creators categorize their projects into one of 13 categories and 36 subcategories. [45] 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 money. These categories, along with Games, account for over half the money raised. [38] Video games and tabletop games alone account for more than $2 out of every $10 spent on Kickstarter. [46]

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 [47] [48]

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. [50]

Notable projects and creators

At $8.5 million, the Ouya is the 8th largest successful Kickstarter campaign. OUYA-Console-set-h.jpg
At $8.5 million, the Ouya is the 8th largest successful Kickstarter campaign.

Several creative works have gone on to receive critical acclaim and accolades after being funded on Kickstarter. Others, such as the Ouya console, have resulted in commercial failure. [51] The documentary short "Sun Come Up" and documentary short "Incident in New Baghdad" were each nominated for an Academy Award; [52] [53] contemporary art projects "EyeWriter" and "Hip-Hop Word Count" were both chosen to exhibit in the Museum of Modern Art in 2011; [54] filmmaker Matt Porterfield was selected to screen his film Putty Hill at the Whitney Biennial In 2012; [55] author Rob Walker's Hypothetical Futures project exhibited at the 13th International Venice Architecture Biennale; [56] musician Amanda Palmer's album "Theatre is Evil" debuted at No. 10 on the Billboard 200; [57] designer Scott Wilson won a National Design Award from Smithsonian’s Cooper-Hewitt, National Design Museum following the success of his TikTok + LunaTik project; [58] the Kickstarter funded GoldieBlox toy gained nationwide distribution in 2013; [59] and approximately 10% of the films accepted into the Sundance, SXSW and Tribeca Film Festivals are projects funded on Kickstarter. [60] [61]

Numerous well-known creators have used Kickstarter to produce their work, including: musicians Jennifer Paige, [62] Paula Cole, [63] TLC, [64] Amanda McBroom, [65] De La Soul, [66] Amanda Palmer, [67] Daniel Johnston, [68] Stuart Murdoch, [69] Tom Rush [70] and Disciple; [71] filmmakers and actors Kevin Sorbo, [72] Alyson Hannigan, [73] Zach Braff, [74] Bret Easton Ellis, [75] Colin Hanks, [76] Ed Begley, Jr., [77] Gary Hustwit, [78] Hal Hartley, [79] Jennie Livingston, [80] Mark Duplass, [81] Matthew Modine, [82] Paul Schrader, [83] Ricki Lake, [84] Whoopi Goldberg, [85] Kristen Bell, John de Lancie and Zana Briski; authors and writers Dan Harmon, [86] Kevin Kelly, [87] Neal Stephenson, [88] Steve Altes, [89] and Seth Godin; [90] photographers Spencer Tunick, [91] Shane Lavalette, [92] and Gerd Ludwig; [93] game developers Tim Schafer, [94] Keiji Inafune, Brian Fargo, [95] and Rand Miller; [96] designer Stefan Sagmeister; [97] animator John Kricfalusi; comedian Eugene Mirman; [98] animators Don Bluth and Gary Goldman; [99] entrepreneurs Tim Ferriss, [100] Samuel Agboola [101] and Craig Mod; [102] and custom guitar maker Moniker. [103]

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

Top projects by funds raised

Ten largest successfully completed Kickstarter projects by total funds pledged (only closed fundings are listed) [104]
RankTotal USDProject nameCreatorCategory% fundedBackersClosing date
120,338,986 Pebble Time – Awesome Smartwatch, No Compromises [105] Pebble TechnologyProduct design4,06778,4712015-03-27
213,285,226 Coolest Cooler: 21st Century Cooler that's Actually Cooler [106] Ryan GrepperProduct design26,57062,6422014-08-30
312,779,843 Pebble 2, Time 2 + All-New Pebble Core [107] Pebble TechnologyProduct design1,27766,6732016-06-30
412,393,139 Kingdom Death: Monster 1.5 [108] Kingdom Death/Adam PootsTabletop games12,39319,2642017-01-07
510,266,845 Pebble: E-Paper Watch for iPhone and Android [109] Pebble TechnologyProduct design10,26668,9292012-05-18
69,192,055The World's Best Travel Jacket with 15 Features || BAUBAX [110] BAUBAX LLCProduct design45,96044,9492015-09-03
78,782,571 Exploding Kittens [111] Elan Lee Playing cards87,825219,3822015-02-20
88,596,474 OUYA: A New Kind of Video Game Console [112] Ouya Inc.Video games90463,4162012-08-09
97,072,757THE 7th CONTINENT – What Goes Up, Must Come Down [113] Serious PoulpBoard game17,68143,7332017-10-19
106,565,782The Everyday Backpack, Tote, and Sling [114] Peak DesignProduct design1,31326,3592016-09-10

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 [122] " Nathan Resnick [123] 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, [124] backed by Tim Cook and Eric Schmidt, as an example of a well funded, investor-backed project using Kickstarter purely for publicity, thus drawing donations from smaller teams.

In addition, many individual projects caused controversy.

Patent disputes

See also

Related Research Articles

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