Happy birthday to Kickstarter that has just turned 10! In ten years this NYC company has helped bring 160,000 creative projects to life together with 16 million backers and creators.
Among the projects that were funded on Kickstarter: the game Cards against humanity; Beryl, a bike light laser that makes cyclists more visible at night; the investigative journalism outlet Bellingcat.
The project that I’m backing right now is “My Love Affair With Marriage“: Signe Baumane’s new animated feature film that infuses music and neuroscience into a personal story of love, gender and marriage.
This is the story of how Kickstarter was born, as we told it in “Tech and the City” (2013): <<The idea of founding it came to Perry Chen while he was trying to organize a concert. Chen, a fan of electronic music, in 2002 lived in New Orleans. He realized he needed a few thousand dollars, which he did not have, nor did he want to borrow money with the risk of not having enough of an audience to pay back his expenses. The solution would be—he thought then—to know beforehand how many people were willing to pay for tickets. Seven years of “wandering” went by from idea to startup, during which Chen was between New Orleans—the city of music and artistic entertainment—and New York—the city of “ambition,” as 36-years-old Chen likes to say. He found his partners by accident, while he was working as a waiter at a restaurant in Brooklyn: Yancey Strickler, a music journalist, and Charles Adler, a designer. The first investor was the actor David Cross, a cousin of a friend of Chen’s, who was followed by other friends in the arts.
Not surprisingly, music or movie production projects are the most popular on Kickstarter. (…) The mechanism is simple: anyone who has a project that fits Kickstarter’s guidelines (excluding investments, philanthropy and now some product categories) can submit it on the site explaining how much money it needs to raise and what it expects to give in return for the patron’s support (an autographed and personalized copy of the book being written, for instance); the idea has 60 days to collect enough commitments and, if it reaches its goal, the project is funded and the supporters’ credit cards are charged. Transparent and without risk for everyone involved. The average project costs $10,000, and the most common donation is around $10. But some initiatives have already collected over one million dollars. (…)
Chen describes Kickstarter as something between altruism and capitalism. People commit to contributing money not hoping for a gain, but because they like the idea or the people behind it; as compensation you expect an enjoyable experience or the satisfaction of having participated in the birth of a cool product. Kickstarter, on the other hand, is not a nonprofit organization: it is in the black, collecting 5% of the funds raised. And it counts among its backers the cream of American angel investors and venture capital funds, from Scott Heiferman of Meetup, to Jack Dorsey of Twitter, to Fred Wilson and Union Square Ventures, for a total of $10 million.
At the moment design and technology projects offered on Kickstarter account for only 5% of the total, but that number is growing quickly. It is a way for inventors to test their prototypes while minimizing risk and costs, turning directly to consumers and skipping traditional middlemen such as banks, who are more and more reluctant to provide funding. (…) >>