An interview with Kickstarter co-founder Yancey Strickler as the service was just getting rolling. Originally published in 2010 in Scion Magazine. Interview by Maud Deitch.
One of the biggest, and often most dream-killingest, challenges facing creative people today isn’t coming up with that million-dollar idea. Rather the real challenge is coming up with the five thousand dollars necessary to make that brilliant brainwave a reality.
In a climate of widespread economic insecurity, the question is not whether or not you want to do something groundbreaking, it’s whether or not you have access to the capital to make it happen. Kickstarter hopes to change that.
Kickstarter is an online fundraising platform for creative projects. Ideas are submitted proposed to the company, and if approved, an explanation of project and a fundraising goal are posted to the site. The creators, Yancey Strickler and Perry Chen, try to take advantage of the vast networks that creative people are able to cultivate using social networks to help the goals get met. Creative gentlemen themselves, Strickler was formerly head of the editorial staff at eMusic, while Chen was a struggling event promoter. After meeting in 2005 and raising capital from their own networks of family and friends, the two saw their idea made into reality in April of 2009 when their platform launched online.
In order to make Kickstarter a sustainable reality, Strickler and Chen developed an all-or-nothing funding rule, stating that a project had reach it’s full funding goal in order to be funded at all. They also decided for every successful project that met its fundraising goal, Kickstarter would receive five percent.
In an interview with Strickler, he explained a little more about how the site got started and what he looks for in a project.
How did Kickstarter begin?
My partner Perry Chen first had the idea back in 2002. He was living in New Orleans
and was putting on a concert. He was going to have to front something like 15 or 20
grand to make it happen and he just thought that seemed idiotic. He knew people would be into it, if only he could get people to conditionally pay up front. That way if the goal was met, something happens, and if it’s not, something else happens. The initial idea came out of that, and then he and I started working on this together about five years ago. We’d just met in Brooklyn, where I was a regular at Diner in Williamsburg. He was a waiter at that restaurant, and we became friends, and then we started working together.
We had this idea for the conditional purchase and the idea of applying it to creative projects. Feeding creativity came very naturally to us because that’s the world that we come from. Just looking around at all of our friends and ourselves we saw that everyone was trying to get money and it’s really, really hard. Most of the traditional funding opportunities are looking for a return on their investment or they want to own your work or they want to make lunch boxes and sequels out of it. Or they want to do all of these things that have no relation to the actual art of what the person’s doing or their motivation or anything like that. It was just very clear that there was something extremely broken and that is where Kickstarter came from.
Did you always think that the internet was the only vehicle for this?
An interesting thing is that when we first started working on this really in earnest, there was no social media. There wasn’t a Facebook or a Twitter or any of these things. It’s a very obvious thing, but now we all have a broadcast platform. This is the first time in history that this has been the case, and so it ends up that we continually gather these friends and followers and things without any clear idea of what we’re going to do with them. But it turns out that a really good application for them is raising money.
The beauty of Kickstarter is that it just sits on the back of these existing networks, and since most projects are funded by people with some kind of relation to the people who started them, you know there’s the people who care about it and are wiling to take a chance. Only after you’ve built a movement of those people do you start to see strangers start to pop in and get involved. But the internet is just super powerful for something like this, and its just so easy to share and so that makes a lot of sense.
There’s an interesting statistic that relates to that a bit, which is that if a project reaches 25% of its funding goal, it eventually succeeds 92% of the time. And so what that says to us is you get this core group of people who love you and who really care, and they start to tell your story with you and for you. And when people start to see that somebody’s in trouble—like, How are they going to make up this big gap?—they just jump in to help because its exciting, because it’s fun, because it feels good, because there’s some reward that you want and you make sure that you get it.
Is that statistic you just mentioned a big motivation for the all-or-nothing funding?
We had no idea that statistic would be true. We like all-or-nothing because its fun, there’s sort of a game and interactive element to it and so you get to follow along and find out “will it make it will it not.”
But there are other good reasons for this system too. If it’s just an open ended sort of thing there isn’t a real impetus for people to jump in. You can procrastinate forever, and people do. You ask anyone with a PayPal button on their website, and I’m sure that’s what they’ll say—they’ll say it doesn’t work, raising money online doesn’t work. And it doesn’t work because there aren’t clear reasons why people should do it.
If people know where the money is going there’s some level of protection for both the creator and the backer, which means we’re all agreeing to these terms. And if we hit these terms then great and if we don’t, no big deal. I talk to almost everyone who starts a project and people are often terrified of the deadline idea, and more so at the beginning. I think that once people launch a project they love the deadline, because it gives them a finite point.
A lot of people use Kickstarter as a place to test ideas and test concepts. If you’ve had an idea that you’re convinced is genius that’s been sitting on the top of your fridge forever that you’ve always wanted to do, well now you can finally see if its worth your while. And you know its funny, when it comes to launching an idea or following a dream, you know you either want it to succeed immediately or fail immediately. You don’t want to take a long time to fail, that’s the worst.
Is that something that you look at when you’re approving projects to go on the site? Do you actively weigh whether or not this is something that will appeal to a lot of people or do you just look at the project and the dedication of the people and allow it to take its course?
I get excited when it seems like a big idea, but no, when we’re choosing to approve projects its entirely about whether this is a creative project that fits our guidelines. Then we’ll help you sculpt your project as best we can, and if you’re nice and you show that you’re really dedicated then we’ll work that much harder with you.
If you’re trying to pitch a charity or a general business expense or trying to buy Jenny a prom dress then we’re going to decline that and say we’re not the right place for this. For us it’s just about creating an environment where you know people can do things that they’re excited about, and so a charity is an interesting example. A lot of charities want to work on Kickstarter, but we built this specifically for creative projects, and its tough, because if I’m writing a book of poetry and you’re saving Haiti, I look like a jerk because I’m writing poetry even though that’s what this is meant for. But there are a lot of resources out there for non-profits already.
Do you advise people about what a realistic amount to ask for is or do you just say ask for the amount that it’ll take to get this project going?
I think that determining a funding amount is probably the single hardest thing about starting a project, because you’re plucking a number out of the air. None of us are trained in this, and its really tough. If you ask for too little then your momentum might die when you hit your goal. If you ask for too much, then you can be completely screwed. I always tell people, “You can always raise more than your goal but never less.”
Ideally you’re shooting for the upper end of what you think it gettable, because you want people to dig a little deep in terms of spreading the word along. But I rarely give specific advice [on how much to ask for]. Honestly with most people, what they can raise is proportional to their own sort of outreach, their own network. I would love if magically one day we could have a little equation that factors how many Twitter followers to do have, how many Facebook friends, how much money is ideal to raise and then be like, This is your goal. But we’ll never be able to do that.
Do you think there are some types of projects that get funded faster, or do you think it really has to do with the people that are behind it?
I definitely see a lot of trends, but they’re not really based on category. If you think about it, communities are really good at learning for themselves. If you think about the first eBay auction, I’m sure it had a manufacturer’s photo as the picture of the product. And it was the tenth guy that was like ,“Oh, I’m gonna take a picture [of the product] on my really ugly blue couch so people know I really have this thing,” and then suddenly that became a new way people behaved on eBay. And we see stuff like that/ We’ll see someone make a really good video that has a really interesting style, and so we’ll highlight it, and for the next month all the videos will mimic that to some degree. And it’s a great thing. I love that people are learning from each other.
I feel like the actual stated goal of the project is actually much less important than the person doing it. I think in almost any case that’s true. I think I’ve backed the most projects out of anyone, I think I’ve backed about 180 projects. It just becomes this social endorsement. Sometimes I care about what I’m going to get, other times I just think they’re special or I want to feel connected in some kind of way. And when I look around the site, I really don’t think of it as a bunch of different fundraisers, in fact I never think of it that way. I think of it as little narratives. There are times when I feel like I’m the dude who loaned Basquiat fifty grand in 1980 and now I’m getting to go over to his loft and see his works in progress. It feels like that, except I’m just a guy that gave them a dollar on the internet.
How much do you feel that promising rewards affects the success of a project? Do you think the straightforward rewards, like a copy of an album or a tote bag work better than the weird stuff?
I think people really want the weird. I think what people want is a story that they can be a part of. They want to be able to say I found this weird thing on the internet that was super cool and this is what I got out of it and this is how I’m involved now. A really good example is an early project by a guy named Earl Scioneaux—he’s a musician from New Orleans and he was making a record. One of his rewards was that for $50 you could come over to his house and he could make you gumbo. And he was like, I make the best gumbo, and they obviously take it pretty seriously down there. So he posted this and all ten of the spots filled up immediately. He was totally shocked by that, so he decided to have a party in his studio and these ten people would come over and they’d have a big pot luck and he’d make the gumbo, he’d play some songs and have some musicians come over you know it’d be just like a New Orleans party. And people who had never met him before drove there from places like Atlanta and Houston. He’s just some dude on the Internet. But I’m sure for them it’s like, What an interesting story, what a cool thing to be a part of. I think things like that kind of push the project further out and it’s a story that we can share.
I really think a driving thing with Kickstarter is something that we will often talk about internally as “affinity commerce.” It’s this idea that we really care about where the things that we buy, the things that we consume, come from. This is the thing that’s driving farmers’ markets and it’s the reason that when we go there and pay the extra $5 for the block of cheese with the note card on it that says it was raised by an Argentinean amputee. When you get to go to dinner that night you have this story about the cheese that everyone loves. And that’s sort of the thing that we do socially now, and there is value in that. We put value in that. I think with Kickstarter we want it to be on a macro level. We all know who our audience is better than anyone else does, better than some record label would or some store, and so when you put that power in a certain kind of person’s hands, they get really creative and you have these sort of magical rewards happen.
Do you feel that “affinity commerce” appeals to a particular age group? Do you see that a lot of the people who are getting involved are either from similar socioeconomic backgrounds or ages or are coming from a certain cultural perspective?
There is a certain kind of consumer who cares about these things, but I think that it’s growing and I think that the internet makes it easier to share this kind of information. There are just so many ways that things we buy are obfuscated from us, but clearly that’s changing. And I think that as it changes more and people begin to highlight these things more, that it will begin to feed itself.
Kickstarter is able to sustain itself through the percentage commission, which allows people to not have to feel insecure about whether or not you’re going to go under before they get their project funded. Did you have a hard time developing a workable business plan for the platform?
I think that we just hoped it would work, and we felt good about charging 5%. We thought that seemed more than fair. We just sort of hoped people would like it, we were making a lot of guesses.
Do you keep in touch with people after they’ve gotten their funding? Have you received a lot of feedback about whether these projects are actually getting started.
Programmatically we don’t do anything like that, but in the bubble of their own project, there’s a lot of communication between the creators and the backers. One of the things that I struggle with is that the way we treat projects is that we really celebrate them when they’re getting funded because we like them and we want them to do well. Once the fundraising ends we don’t really do much to highlight it, but that’s when a lot of the interesting stuff starts to happen.