Transcript

Crowdfunding Creative Projects

April 13, 2012

0:00:0

MICAH SIFRY: Hi everybody, this is Micah Sifry from Personal Democracy Media bringing you another in our on-going series of Personal Democracy Plus conferences calls with movers, shakers, thinkers and doers, innovators in the space where technology is colliding with politics, government and civic life.

And today really excited to be joined by Yancey Strickler, one of the co-founders of an amazing website, turning a lot of heads, Kickstarter.com, which is one of a new breed of crowd-funding platforms that everyday seems to be setting records and generating all kinds of creative and wonderful new kinds of projects with all the money coming from supporters who are just generously donating and enabling lots of dreams and lots of really great ideas to flourish.

And today we’re going to dig in with Yancey on the background, how Kickstarter got going, what lessons they learned on the way to making it such useful platform to the point where now the amount of flowing through it has already topped I believe $170 million and continues to surprise people with just what’s possible today with crowd funding.

So, without further ado, I’d like to welcome Yancey and Yancey, if you maybe want to start off and tell us a little bit about how -- where did Kickstarter come from and you know, what have you learned in the early days, how did you figure out how to make it into the platform that it is today?

YANCEY STRICKLER: Well sure, well first off thanks for having me. I’m really honored to have been invited. Hello to everyone who’s listening.

Yeah, you know, Kickstarter began quite awhile ago actually. Perry Chen who’s our CEO and one of my co-founders first had the idea for the site 10 years ago. He was living in New Orleans, working as a studio engineer and just kind of hanging out and he wanted to put on a show during Jazz Fest in New Orleans but it was going to cost a lot of money to do it, and he had this idea of if only people would pay upfront and he could use that to measure how much interest there was in the thing happening and if a certain number of people wanted to go, the show could happen; and if not, the show wouldn’t happen. So, that all or nothing further idea.

So, he had that idea and wasn’t totally sure what to do with it and the two of us met about three years later here in New York at a restaurant. And I was working as a rock critic at the time, and Perry was waiting tables among other things and he shared this idea that he had. And so we started talking about it and about a year later, we met our third founder through mutual friends, a guy names Charles Adler, who’s a designer.

So, the three of us were not technical, Charles was the most technical and he could at least make something that looks like a webpage. But you know, we really faced an uphill climb being three non-technical founders, which is something everyone advises against and for good reason.

But our motivations from the beginning were always really came a lot of from personal experience. You know, me working as a rock critic, I was working closely with a lot of bands and I also had a small record label of my own that I had started at a job where I was working. And so I was really aware of how hard it was for artists and musicians to not only make money, but actually just to make the thing in the first place. And that’s what we saw among our friends that while everyone is debating what’s the future of the music industry or the film industry or all those things, the questions were really about how will art or culture eventually get monetized but no one was actually really talking about how do you make things in the first place? And from our own experience we knew that was the really difficult part.

And we were also seeing a funding system, a traditional system that had very different motivations than the artists themselves did. So, the ideas that could get funded, whether it’s from a record label or a film studio or a bank loan, the idea was to have the potential to make money, to produce revenue. But of course, 99 percent of ideas have no ambition to make money, they just want to exist; that’s what an idea really is.

But we had a funding system that largely ignored those ideas. Really your options there were to apply for a grant and you know, that’s great if you can wait the couple years it takes to hear back from some of them. Or you had to have a rich uncle or you piled up some credit card debt, or you just made some sacrifices and the work itself.

And so we really just saw that there was this space that was needed for things that we simply just wanted to exist, that an audience could will them into happening. And so that’s what we were devising Kickstarter to be.

But you know because we weren’t technical, because we didn’t know how to code, it took about three years from us working on it in a very concentrated way, Charles and Perry especially, before the site launched. And the site first launched on April 28th, 2009, so our three-year birthday is just three weeks away.

And you know, when the site launched there was no big to-do, there was simply a webpage where there hadn’t been one before. Our only marketing effort was that we gave about 30 to 50 of our friends invitations to start projects and they each got a couple invites to give to their friends. And that’s still the only thing we’ve ever done, and everything that happened on Kickstarter really emanated from there.

And I remember when we launched, my own personal goal was there one project would get funded in the first month. That seems like a really good milestone and instead we had two get funded in the first week; the very first successful project raised I think it was $37, it was for a guy who would draw you a picture of something and it was a fairly modest goal. The other one that was successful in the first week was for $100. But the site began to build some steam.

The earliest project that really kind of hinted at the kind of potential this had is -- as not only a tool, but also as a story-telling device was from a woman named Alison Weiss and she’s a musician, a singer / songwriter from Georgia, and she just put up this video that was just really personal and really connected. And she gave these reasons why you should support her and they were things like, ‘you like me,’ or ‘I promise it won’t suck.’ And she was very honest and very human. That video and that project, which launched our second week, it’s still kind of a model project that people look at. And it was also the very first project that we that exceeded its funding amount.

You know, so every project on Kickstarter you set a funding goal that you have to reach, and we had assumed that projects would sort of get to their goal and then stop. And Alison raised her whole $2000 goal within about 12 hours, and she ended up raising four times that. And actually before Alison or all of our little widgets stopped at 100 percent in showing the percentage of funding, and after her we thought, well maybe we should show what the actual percent is and then we started showing that. So that was just an interesting milestone.

But the growth of the site since has been steady. The web world that we come from, people talk about a hockey stick moment where your numbers just go crazy and our growth has been much more organic. People hear about projects from friends, when someone you admire or that you know launch their project, it validates it for you in some kind of way, you’re encouraged to maybe check it out, and it’s really grown in that kind of way.

I remember in the first year, we got a project that was Indian classical dance and because there were only a couple thousand projects’ lifetime at that point, I knew everyone very intimately and it was interesting, we’d never seen an Indian classical dance kind of project before. But by the end of that week there were five on the site, and it became apparent that this was flowing through networks, through niches, through communities. And that was really exciting to see.

So, now we’re nearing our three-year anniversary and the past six months have been especially exciting. It’s grown quite a bit. The big news has been a few things; on I believe it was on February 5th or February 6th, the very first Kickstarter project exceed $1 million in funding, and it was for an iPhone doc and it ended up raising about $1.5 million by a guy named Casey who lives in Seattle.

And so that project hit $1 million and it was a real exciting moment for us. But just two hours later, the second project crossed $1 million and that project had only launched the day before, and that was from a guy named Tim Schaeffer who’s a fairly legendary video game developer, but he’s a guy who’s always been stuck on the margins of that industry. He makes games without -- that aren’t idiosyncratic, that aren’t shoot-‘em-up kind of things, and for that reason, he’s always troubled to find funding.

And ironically he’s someone who has been on our dream list of creators forever. We’re all big admirers of his. And so he came and launched a project and really it just became a place where his fans could give voice to their love for him. And so that project ended up raising $3.3 million by the time it was over.

And so we’ve gone from one project exceeding $1 million as of that day in February to now five have. The most recent is a project called The Pebble, which is a watch that launched on Tuesday and it’s about to cross $2 million, it’s probably doing it as we speak. And so that’ll be the fasted project at $2 million so far.

So, these huge funding totals are exciting because what they show is that as a tool, the capabilities and scale that Kickstarter has, we really don’t know its potential yet. You know, what we’re seeing is what’s happening as the site becomes more and more well known and as people who are better known are using it.

So, we’re excited to see where it goes, but still the heart and soul of the site are in more modest projects. The most common funding amount on Kickstarter is $5,000; the most common pledge amount is $70. And there have been over 20,000 projects successfully funded so far. So, it’s been a lot of regular people contributing money to just products by their peers. We’re a site that is by the audience, for the audience.

And we really like that about it. We don’t allow corporations to sponsor projects and we don’t take advertising or anything like that. When we hear from brands, we simply instruct them to -- if they want to support a project, they should sign up for a Kickstarter account and back it just like anyone else. They don’t get any special privileges on Kickstarter.

And so it’s an eco-system that is just meant to celebrate creativity. There are 13 categories on the site and all are based in the traditional arts. We have a few guidelines about what’s allowed on Kickstarter. Everything has to be a creative project, and “project” meaning something that is finite with a clear beginning and an end. We also require that every project fit one of the categories in the site, it’s something based on the creative space. And we also don’t allow any charity funding or any fund-my-life kind of projects. So, it all had to be, you know, you’re producing some piece of work, something along those lines.

And that’s how we’ve guided the site to date. In terms of the company itself, we’re based in New York. Our office is in the lower east side on Rivington Street, we’re in an old tenement building, we have three stories of it and we have a door that’s covered in graffiti that can use as people come visit us. The staff is 38 people, about half of them work on the product, designing and building the website and the tools with it; and the other half are people who work directly with the projects, whether it’s curating the site, doing editorial things, talking to creators, doing outreach things, along those lines. So, it’s a nice mix.

But you know, we’re a fairly young company and we’re learning as we go, but we’re thrilled by what’s been able to happen so far.

MICAH SIFRY: Yeah, it’s a wonderful, wonderful story and a lot of things I want to ask you about. I just wanted to observe, it’s so interesting that your launch in the spring of 2008 --

YANCEY STRICKLER: 2009.

MICAH SIFRY: 2009, you said, but you the conversations beginning earlier, that’s exactly at the same moment that we see a whole bunch of other things that all fall under this heading of people helping people or people -- the peer-to-peer civic space starts to explode then. That’s when See.Click.Fix gets started, that’s when (inaudible) gets started. I’m beginning to wonder if there was just something like critical mass starting to get achieved then.

First thing I wanted to ask you was Kickstarter, I mean, did it come with these sorts of assumptions at the beginning about you know, what you would or wouldn’t fund or how people would be rewarded for donating. I mean, you’re not the only crowd funding effort out there. I mean, did you study what other people were doing and make some decisions on that basis?

This is like advice for other people on how does one navigate the launch and not just -- I mean how much did you learn from the mistakes or the efforts of other people?

0:15:00

YANCEY STRICKLER: Well I think that the idea -- certainly there was some evolution to it. You know, Perry’s original inspiration is really the mechanism, the idea of setting a goal and something happens when the goal is reached and it doesn’t happen if the goal is not reached.

So, that was sort of the starting point. The focus for the arts and that side and not allowing charity, that’s something that evolved once the three of us working on it together and just thinking about the right application for this.

The idea of rewards being a part of it, that was always there. We were always really determined that these not be donations, that these be value exchanges because with donations you get fatigue. But if I give you $10 and I get $10 of something in return, at least there’s an exchange there and that’s something that we saw as being more likely for people to do again.

And we also thought a lot about you know, what the implications were of all or nothing, of would that spur people into action? Would that cliff that people are facing make them fight for their projects? And we thought that it might.

You know at the time we launched, I think there had been maybe four or five websites that had done things vaguely similar, and one was focused on music called (sounds like: Sellaband), you know, they were focused on a variety of different things, specific industries or things like that.

But we didn’t learn anything from any of these places. In fact, we know that some of those only towards the very end (inaudible) were going to launch. You know, we really had our own idea about how this should work. And it’s telling after launched, every other website re-skinned themselves to look exactly like Kickstarter.

And at this point, I think there are -- I think it’s close to 200 crowd funding sites out there and virtually every one of them is a copycat of Kickstarter. And some are focused on specific countries. You know Kickstarter’s only available in the US, in terms of launching a project right now. I know there’s a focus on specific verticals but certainly, you know, we are the clear market leader and thought leader on all those kinds of things.

But it really is an expression of our beliefs and our own values and just like what we felt would work. I mean, we have no experience in this kind of thing. We were simply just going from the gut.

MICAH SIFRY: I’m thinking of two that we were certainly paying attention to, there was something called Pledgebank, which was an outgrowth of some folks tied to the MySociety group in the UK, which was not about sort of people giving money to help a project get started, but people pledging to do something once a number of people all agreed to make the pledge to do it. And I think they’re still out there, but they’ve never really taken off.

And I think there’s something about that money as a very clear signifier of, ‘I need x to get this thing off the ground, I’m going to do a lot with that x, and you’re going to get something back for your little piece of it.’ It’s a very clear kind of exchange of value you know, in creation of something of more value and I think Pledgebank was actually very interesting post mortum online by one of the founders where he talks about you know, speaking with you and that you realize, you know, giving rewards to people directly is a good way to avoid the sort of donation fatigue of just being asked again and again to give and get nothing back.

Though don’t you think people who are giving in many cases don’t really care about the reward as much as the sort of psychic reward of seeing somebody else get to do something cool or try something unusual? That that’s reward enough is to see these projects succeed?

YANCEY STRICKLER: Yeah, I think in some cases that’s true. I think that is probably largely determined by the relationship between that person and the creator. So, in some cases if it’s a friend of mine or a member of my family, I can see thinking, ‘well, it’s just more about Jimmy getting the chance to do his thing than it is anything.’

With some percentage, I think it’s about 20 percent of pledges, are either choosing no reward or a pledging over the amount that is being asked. So, there you’re seeing just some generosity I think of people just being excited to be a part of it in the same kind of way.

But the rewards are such a key part of Kickstarter. I mean, we’re really adamant about this not being a donation platform. We talk about Kickstarter as being a blend of commerce and patronage and also some community building, too. You know, you’re setting up a series of offerings, you’re basically constructing a mini-economy around your project and you’re giving people a chance to play around there.

And one of the things we really see as a big determinant on how a project will do whether it is successfully funded or not are its rewards, you know, how those rewards are structured, whether they’re priced higher than average or along the same lines. And you know there is definitely self-interest and consumer behavior as a part of it. Interestingly, it’s just consumer behavior often around things that don’t even exist yet.

MICAH SIFRY: You mentioned that a lot of projects end up getting funded at a much higher level than the target, but the trigger mechanism for when somebody sort of kicks in $60 is you don’t get charged if the project doesn’t hit the target at all.

So, how do you decide keeping the window open to allow a project to actually get over-subscribed if you will? How do you decide that? Is that up to the project owner how long they keep the window? Or is it the time period? How does that work?

YANCEY STRICKLER: Yeah, every project continues until its deadline no matter what and neither the funding goal or the deadline can be changed once the project launches. So, say the average Kickstarter project is looking to raise $5,000 and is giving himself 30 days to do it. If it raises that full $5,000 in Day 1, that creator still had to wait 30 days for those credit cards to get charged and that money to be transferred to them. And during that time, they continue to accept pledges.

And earlier on when we were making the site, we actually originally had it that it would stop once someone reached their funding goal, but thinking that through it just seems confusing because we’re encouraging people to think about deadline of some future date and suddenly that future date is irrelevant.

And also, it made sense to use that as a project go be nearing its goal, it would probably be the moment it would have the most attention on it. So, suddenly you’d be locking a lot of people out, and that’s kind of interesting from a gamesmanship point of view. You know, you have to get in fast to get in. But there was just something about that that was just so marketing that just felt kind of dishonest to us.

So, we like the idea of you setting a goal and as many people can participate as they way. So, the average successful project raises 130 percent of its goal, so projects do tend to raise significantly more than they’re looking for. But parted of that is being weighted by projects that have great exceeded it.

For example, the first project to raise $1 million, which ended up raising I think about $1.4 million, it’s funding goal was $75,000. So, that’s overshooting it by a little bit.

MICAH SIFRY: That’s the dock for the iPhone?

YANCEY STRICKLER: Yeah, and the same with the Tim Schaeffer project which raised $3.3 million, it’s goal was $400,000. And so you know, if people want to be involved and there’s certainly a momentum to projects as they start to accrue backers, it’s just going to continue to pile up.

MICAH SIFRY: How many individual backers now are have you seen (overlapping remarks).

YANCEY STRICKLER: At Kickstarter?

MICAH SIFRY: Yeah.

YANCEY STRICKLER: Yeah, it’s close to 2 million and I think it’s about 350,000 of those people have backed more than one project. I personally have backed about 600 projects and I think I’m maybe number 10 or 15 overall?

So, there are people who have backed more than 1,000 projects and they don’t work here.

MICAH SIFRY: Wow! And there’s one feature that I’ve really been struck by and I can’t remember -- I don’t think it was there at the beginning, but I assume that it must have some very powerful affects, which is that you can pledge once and go away but the site really does urge you to create a profile and once you do that you can -- you’re history of the projects that you’ve backed becomes visible. And you can actually also see how other people -- you know, what other people have done who might be people that you know.

I’m curious about the sort of social element. Was that there from the beginning first of all or is that something that you added as an additional feature at some point?

YANCEY STRICKLER: Yeah, you’ve discovered out top secret social feature. That’s something that we introduced just actually a couple weeks ago, and we haven’t even announced it yet. We just -- on our staff, we all just kind of like we originally did Kickstarter, each of us on the staff followed five people outside of the company and all we did. And we just decided to see how far it would go based on that.

So, it’s gone pretty far so far but yeah, it’s a feature that will notify you, if you choose to opt in, it’s very easy to opt out. If you choose to opt in, it will notify your Facebook friends who have also opted in when you back a project and you’ll get notified when they back one, too. And the same goes for if they launch a project.

And it is, it’s fascinating to see there’s kind of a new behavior that’s come from it from this swarm effect that we’ve noticed in small waves of one person backs a project and then their friend does and suddenly a whole group of friends are supporting the same thing.

And so that’s been kind of neat. But we’ll be rolling out social, more prominently in the next couple of weeks. So, we’ll see how people like it. We think it’s a useful tool and like we do everything, we really took a lot of care to think through how to do it in a best way and how to project people’s privacy and make it very easy to not do it if you don’t want to do it. And that’s our starting point for all of our features.

MICAH SIFRY: Yes, Yancey, to be honest, I actually didn’t -- I mean, the fact that you’ve added the sort of Facebook connect feature hadn’t crossed my radar until you mentioned it. But what I had noticed was -- and I’ve done, I think I’ve backed 10 projects, full disclosure on the site and I’m obviously a fan -- but what I had noticed, I mean there are two ways that it seems to me I was hearing about stuff; one is obviously direct outreach from somebody who knows me or a friend who was acting on their behalf. And the other was Twitter where you back something and as soon as you do so, the site gives you the option to Tweet about it. And that’s also a very compelling when you see somebody say, ‘we’ll I’ve got 36 hours left, and we’re almost there,’ is often a very compelling reason to jump in.

So, the social-ness, what I meant there was that I could then see if I back a project, you know, and you can just scan through the list of the other people who have backed projects. The part to me that was already social was that by default support is public. I mean I guess there’s a way if you want to keep your support private --

YANCEY STRICKLER: Well, you can make your name whatever you want it to be. But it’s very supporting -- every project is a collective action. It is a community action (inaudible) together to bring something to life. And sometimes these are networks of friends; sometimes they are all fans of a similar subject; sometimes is geographic, you know? We’ve had a great strand of urban design projects, people creating community gardens and rehabilitating public spaces. And those you’ll see are largely being funded by people who are directly around them, so it’s basically a civic effort on behalf of a community to do something.

So, the social-ness is a really huge part of the site and yeah, it’s something that is just inherently there.

MICAH SIFRY: So, what I was going to ask is there a way for a user to tap into those social features without necessarily doing the Facebook connect thing because of -- I may trust you a lot more than I trust Facebook to be honest. And I think other people may feel that way.

And the ability to affiliate across friends or geography that’s another great one, you know, the discovery of new projects. You know, recently I was talking to Scott Hefferman, the Founder of MeetUp and they’ve just had a huge surge in new signups in the last few months, and clearly because they’re also tapping two things: one is the Facebook element that if you join and meet up you can notify your friends on Facebook. But other one is simply if you sign up for a meet up, the meet up itself will say, you know, recommend other meet ups like this one that might be of interest to you the same way Amazon will tell you about books. You know, you bought this book, well you might be interested in these five other books.

So, it’s very light suggestion models. Are you guys thinking you would go in that direction too, or it’s really keep every project to itself.

I suppose -- the way I’m hearing you, it sounds like you’re going to kind of just see how this flows, right?

YANCEY STRICKLER: Yeah, it’s going to start from there. I mean, right now if you back a project on the Thank You page, it shows some related projects. But that’s as much as we do.

There will be some changes to the site very soon that will shift how you discover things so I think the people will be excited about that. But you know, I think for most people the tools they use to find projects are very similar to what you say. Even for me, most projects I back are just thinks that I know people Tweet about. It’s by far the most effective way to find things.

MICAH SIFRY: Okay, we’re at the half-way point here, so I’m going to just pause and let folks who are listening know at this stage if you want to ask a question or make a short comment, the thing to do is hit *6 on your phone and I’ll see you show up in the Q&A queue and then I can unmute your phone and bring you into the conversation.

We’ll take a brief pause to see if anybody’s really jumping at the bit to join in. And I’ll keep things going in the mean time.

Yancey, one thing that is I’m sure of a lot of interest -- wait, we’ve got a call. Looks like it’s somebody from maybe overseas.

Hi you’re here with Personal Democracy Plus, Yancey Strickler. Go ahead, tell us your name and ask your question.

PARTICIPANT 1: Hi Micah, this is Hadas Eiel speaking.

MICAH SIFRY: Hi Hadas, from Israel.

PARTICIPANT 1: Yes, from Israel. Thank you so much for this wonderful call and it’s really been a pleasure.

I’m going to ask, there is a Kickstarter Israel, there is a page like that. And my question is -- I had other questions but you guys have answered them as we were going along. Is it country specific if I have a project in Israel, can it only be funded by Israelis or can it be funded from people who like the idea from anywhere in the world?

MICAH SIFRY: Great question.

YANCEY STRICKLER: Well so on Kickstarter, projects can be backed by anyone in the world. It doesn’t matter what country they’re in to support it. The limitation that we have now is that to start a project, you much an American citizen or be based in the US. There’s a few qualifications.

And these aren’t our restrictions. We using Amazon payment to process all the transactions on Kickstarter. And this is a restriction they have with their system. And basically it’s limited because of international banking and credit card regulations.

So, expanding Kickstarter to more countries around the world has been our biggest priority for a while and we have a team of people working on it and we’re hopeful that we’ll start to see some developments there in the next year or so.

So, hopefully we’ll be in Israel at some point.

PARTICIPANT 1: Good. Let me ask you one more question. Do you need to be a resident or just a citizen?

YANCEY STRICKLER: I think it’s a resident. If you go to our website and you click the (overlapping remarks) it’ll explain.

MICAH SIFRY: Okay. We have another question coming in. Looks like it’s someone in Georgia perhaps? Go ahead.

PARTICIPANT 2: Hi, I’m Katherine (inaudible) from New York, actually.

MICAH SIFRY: You’ve got a 404 cell phone (laughter).

PARTICIPANT 2: I’m calling because I wanted to ask how Kickstarter keeps pernicious causes off the site. I remember when Omidyar started eBay, he wanted it to be a completely open platform but yet people were trading handguns and so forth. They heavily had to moderate counterfeit and legal goods and so forth.

And also how you moderate your forums and language and so forth?

YANCEY STRICKLER: Sure, that’s a great question. So, when someone wants to start a project, they build the project page and before it goes live, they submit it to our team for review. And we have a team of about five or six people who look through these projects and what we’re doing is we’re looking to make sure they don’t violate the guidelines.

So, we’re looking for things that are really open-ended or we can’t tell what they are, we’ll send those back for questions. Projects that are seeking to raise money for charity or to pay off bills or things like that, we’ll just decline. And there are some other things that we will work through with people.

So, most of what we get ends of being accepted. But it’s a by-hand process, so it’s a difficult one to scale up. And just to talk a little bit about why we don’t allow charity or cause projects. There’s a long history of fundraising in the United States and most recently we’re used to fundraising being I think you know, the Jerry Lewis Telethon and charitable efforts or giant thermometers outside of the high school gym.

And because we were really focused on fundraising for creative projects and artists, we felt like we really needed to redefine what we were doing. And we also imaging what would happen if you did have charity projects on the site.

So, if you imagine one person’s project is to publish their first book of poetry and right next to them is a project to say raise money for Haiti. And without even trying, the Haiti projects makes the poetry project look insensitive, like a jerk, how could you be doing something like this when people are dying in the world.

And that kind of equivalency is a tough thing. And of course, we could think of any way that we spend money that way if we really want to. But we thought really making a space just for creativity was important. You know, we’re bashful enough with trying to follow through on our passions, the things that we really want to do, and we felt that that kind of environment would be something that would dissuade people from using it.

And so, you know there are other places where people can go to support charities and to raise money for causes. We’re really steadfast about Kickstarter just being for creative projects.

MICAH SIFRY: But there are ways -- just to follow up on that, and thank you for your question -- there are ways for people who have you know, political content to their creative project to get funded. I mean the example that most comes immediately to mind, recently some people from Occupy Wall Street put up a project on Kickstarter to create the Occupy Wall Street Journal, which I remember they asked for $12,500 to put out one printing of 50,000 copy, eight-pages, free printing of the Occupy Wall Street Journal. They ended up raising something like $75,000 and putting out several editions.

YANCEY STRICKLER: Yeah, the Occupy Wall Street Journal is a great example. And we actually spoke to them directly about it. And we had some conversations about, ‘listen, is this editorial?’ ‘What is this for you?’ And they were really adamant that it was documenting what was happening and providing a voice and they really had a great pitch from an editorial perspective.

So, we did actually -- we had some pause about it and we try not to get that granular with things, but we knew that would be a particularly high-profile project. But yeah, they did a great job and it was very successful.

MICAH SIFRY: And it certainly fits under the heading of Publishing, right, which is one of the categories.

YANCEY STRICKLER: Yeah, absolutely.

MICAH SIFRY: Yeah, so I think that it’s clear that projects that have social content in the sense that they’re responding to something that’s going on in the world and that our creative response have a place in the Kickstarter universe, but if somebody say, ‘we want to fund the political ad attacking our senator,’ you’d be like, ‘no, go -- there’s a number of other ways to do that.’ And you’re trying not to become a place that’s just the same old political noise.

There’s a question I see on Twitter from Karen (inaudible), I think it is who’s just wondering about the average age of people creating projects on Kickstarter and the average age of people funding. I don’t know if you would know that, but worth asking anyway.

YANCEY STRICKLER: Yeah, we have zero demographic information about our users. We’ve never asked and I don’t know if we ever will. So, I don’t know, your guess is as good as mine.

MICAH SIFRY: Okay. We have another call coming in, someone from a 207 area code.

PARTICIPANT 3: Thank you. Hi Yancey, my name is Alex Hammer, I’m calling from the State of Maine, and my question I’m wondering that you obviously don’t have a crystal ball, but based upon your experience, what do you think some of the potential long-term trends in crowd funding going forward?

YANCEY STRICKLER: Yeah, that’s a good question. I mean I think that it’s certainly getting more mainstream. I feel like crowd funding as an idea is something that has been bubbling on the edges of web culture for a while and there have been various one-off experiments that have been notable in past years, the musician, Jill (sounds like: soebuehl) raised $80,000 very early on, that was a big success. There was also a group of people in the UK who bought a soccer team through crowd funding.

And so, you know, it’s gone from being the edges of the web to you know, thanks to platforms like Kickstarter, now more in main stream web culture and I think that will continue to be the case.

The other trajectory I think that could be happening, speaking especially from our perspective, is that we’ve always seen one of the things that might holds one back from launching a project is they’re just not sure how it’s going to look. It’s weird talking about money in public. We’d rather talk about sex or politics in public than we would cash. And especially for artists, artists you want to pretend that money doesn’t exist.

And so the idea of putting yourself out there and saying, ‘hey, I’m John and this is what I want to do and this is what I need,’ it’s a barrier, you know? People are going to feel uncomfortable with it and we’ve always assumed that that would be the case.

But with time that action becomes something that is more socialized and just something that you have less of a reaction to in that way. So, if you imagine the first one of your friends who joined Twitter or Facebook, you probably first thought, ‘well, what’s with that guy?’ And it eventually becomes a social backbone for a lot of us.

And so our hope is that Kickstarter will be on a similar kind of trajectory and that more and more people will use it and feel comfortable using it and that whatever political hue it might have or be making some kind of statement or purpose just by using it will go away and it will simply be a tool and just an extremely effective one.

And if that happens, then I think that the possibilities are pretty endless for what it’s capable of. You know, if Quentin Tarantino decided tomorrow he wanted to make a $20 million movie directly to his fans and do it just the way he wanted, he could come to Kickstarter and he could do that. I think he would be successful.

And so the scale of what’s possible you know, I think is only going to be limited by who decides to use it.

MICAH SIFRY: So, say a little bit more about what the project owner gets from Kickstarter other than the money. Like, in terms of you get some advise as the project is being put together and posted, but afterwards. Do you end up with an email list? Do you end up with ability to go back to people through Kickstarter?

What sort of on-going network does the project owner walk away with?

YANCEY STRICKLER: Yeah, you get both of those things. Your project page lives on forever, and every project has project updates, which is basically a blog specific to it. And every time an update gets posted, it immediately gets emailed out to all the backers, straight into their inbox so it’s a really good communications channel. So, you have that until the end of time.

Also when you are successful you get the names of all your backers as well as their email addresses, so if you do want to contact them outside of Kickstarter you can. And then we have survey tool that allows you to ask for their address or things like that to fulfill rewards.

But that’s really it, you know? There are a lot of other things that needs and services that creators are looking for. If you’re a filmmaker, you’re probably want to know how to distribute your movie; if you’re an author, maybe you want to know where to print your book. We don’t get involved in any of those things. We’re focused on just this very specific layer, you know? We think that the strongest companies and the people who really do a great job are people who are very focused on a specific thing that they just try to be the best possible at.

And we feel that way about this moment, about creating an environment where information is traded very easily and that’s a place where backers can come and find great things that they want to support.

And so our focus is always going to be on that part of it, but certainly as a creator, you get the tools you need to complete your project and then, you know, there’s a wide world of tools outside of Kickstarter that can help you do a lot of other things, too.
MICAH SIFRY: Right. You wouldn’t set up like a Kickstarter bulletin board -- I mean is it (sounds like: Keyga) -- one of the other big crowd funding hubs actually has a really interesting like community bulletin board where -- you know, it’s for people who just want to talk to each other and you know, it’s interesting because I understand why you don’t why you don’t want to take advertising, why you don’t want to kind of infect the site with commercial messages. But when you consider how many people are coming to Kickstarter and in many cases succeeding, who are creative folks who actually really do need other help, not just financial but they might need advice, like what are the five biggest mistakes you ever made dealing with your accountant?

And so do you like make a deliberate decision not to put up a bulletin board for that sort of community self-help or --

YANCEY STRICKLER: We did, we did. There was one very early on for almost about a month before we pulled it out. But yeah, I mean, I think all the things you’re talking about are fantastic and I definitely see a reason to have those things. I mean there’s a tremendous community around Kickstarter and it’s all kind of off Kickstarter where the conversation takes place.

And I like that because it shows that it’s a really healthy community that’s willing to extend like that. But it’d be also great to collect a lot of that wisdom you know, within Kickstarter itself. So, you know, if we can come up with a way to do that and that doesn’t require a lot of moderation that can be very focused, that isn’t spammy, that isn’t full of people having political fights and all the other territory that comes along with message boards, we’ll certainly do that.

0:45:10

We know the community is really excited and people are thrilled to be a part of the projects and to brag about the things they’ve backed. And we love to be a place where they can that and if we can figure out the right way to implement something like that, we certainly will.

But you know until then, we don’t want to distract ourselves too much with the kind of stress and work that can come from really managing a healthy community.

MICAH SIFRY: Yeah, maybe as it grows. I’m going to take another pause here to see if there are other people thinking about asking a question, you just need to hit *6. And I’ll wait a moment.

Yancey, how do you police fraud? How do you make sure that somebody actually follows through and then I see I have a question that’s just popped in. But quickly, what do you guys do about that?

YANCEY STRICKLER: Well so we don’t investigate anyone’s ability to complete a project when they come in. You know, projects are trying to do a whole variety of things and you know, we’re not in the business of trying to figure out what someone’s actual capabilities are. We say it’s up to them to make the case for their project and it’s up to them to fulfill those responsibilities if they are successful. And it’s up to backers to decide what they want to support and what they don’t.

So, what we’re relying on is the discernment of backers to sniff out the really ridiculous ideas that can never happen and I think they do a good job of that.

Projects are often funding things that don’t exist yet, and so before a creator can fulfill their rewards, they have to make them first. You know, it’s not like going down to Best Buy and getting something shrink-wrapped that’s sitting on a shelf.

But every project has an estimated delivery date that’s that creator’s best guess about when things will be ready. But dates sometimes slip, it certainly happens and as long as the creator is communicative about it and just honest about it and saying, ‘hey, you know, this part was harder than I thought,’ or ‘it ends up my lead actor can’t speak English,’ or whatever the story is, as long as they talk about it, backers are really forgiving.

And you know, if a project does goes quiet the backer should contact them directly and try to wake them up and if that doesn’t work, we’ll do the same. But in the end, all the exchanges are just between the backer and the creator and so when backers are supporting something, they should be sure they feel good about it.

MICAH SIFRY: Have you had cases where people gave money and then the person didn’t finish the project? I mean, is there a way to sort of ban that project creator from the site or how would you --

YANCEY STRICKLER: Yeah, that I know of, that has not happened. Certainly there are things that have dragged on longer than anyone would have liked them to, but again as long as someone is communicative, those things tend to work out all right.

But as far as I know, there has not been an instance of someone taking the money and running. If that happened, we would certainly work with law enforcement or whatever to try to take care of that. But you know what we see is that people are honest, you know? People are really -- people are putting a lot of trust in them by supporting them and over and over what you hear when talking to creators is they just feel overwhelmed by the support and the generosity.

MICAH SIFRY: And of course they are putting their name out there and their reputation and --

YANCEY STRICKLER: They are, they are. If you were to screw people over you know, you have bigger problems than just Kickstarter because as I said before, you know, most projects are funded by the fans, the friends, the networks around people, so you know, these are not just strangers that you would be making trouble with. It’s your community, it’s the people that really love you.

MICAH SIFRY: The question from it looks like Mariana Reese, maybe -- go ahead.

PARTICIPANT 4: Yeah, actually it’s Peter Einstein and this is my girlfriend’s son. (Laughter)

MICAH SIFRY: Caller ID is a wonderful thing.

PARTICIPANT 4: Two questions: one, what happens in the case of an overfunded project? Is there a restriction as to what people can do with the money? Does it have to be related to the project just to make it bigger or can it be a spinoff of that project that -- I guess you see where I’m going with that.

YANCEY STRICKLER: Yeah, what happens when a project gets overfunded is the money goes back into the project. So, in a lot of cases it’s just a matter of making more of the thing. You know, I was trying to raise $5,000 to make 100 things, now I’ve raised $500,000 and now I have to make 10,000 things. Certainly your scale can get better as you’re ordering more and more.

Although in some cases, the opposite is true interestingly. So that money generally goes to do that for things like video game or like an album, people tend to put the money into, all right, we’re going to work with a better engineer or things along those lines.

We don’t have any specific rules about saying what you have to do with that extra money, but it’s always pretty clear. I mean, you know, it’s not like when our first big success was a guy named Scott Wilson who’s making the Tick Tock, which is an iPhone nano into a wristwatch and he was trying to raise $15,000. He ended up raising $945,000. So, it’s not like that extra $930K bought him a yacht somewhere. That money had to go into making more watches and scaling up his vision of what he was doing.

PARTICIPANT 4: And the other question is what happens if there’s an event that -- I mean a project that doesn’t necessarily fit cleanly into one area or another but part of it does. I’ll give you an example of what I’m getting at.

For example, if somebody might want to put on a really cool kind of event that might have something to do with crowd funding for example, but one of the aspects of it is that they want to turn it into a video and make a documentary about it.

So, some of the funds would go towards helping Kickstart the event, but also most of the funds would go to the video. But it’s kind of hard to separate the two.

YANCEY STRICKLER: Yeah, in a case like that I would say that that’s something that we would probably decline. The documentary about a thing is always an interesting line and a gray area that we come up against quite a bit.

But you know, we try and keep things focused on this idea of a creative project, so things that are producing a creative work. So, while what you’re talking about I’m sure would be great and people would probably be happy to support, as we try to draw a circle around what it is that we do, which is not an easy thing, my thinking is that would fall outside of it.

MICAH SIFRY: So, we’re getting close to the end of the hour, how does -- Kickstarter’s a private company, right Yancey, so is there a pressure to get a big return on investment to your backers? I mean, how do you navigate that space? You have such a great sort of social vibe but at the same time we know it’s what -- the world that we live in.

So, how do you relate to that? I mean, do you have to sell it at some point? Or you know, is your goal to just keep growing and growing? What’s the future?

YANCEY STRICKLER: You know, our goal is to continue to do what we’re doing and to do it better and better. I mean I don’t even think growing is a goal for us necessarily. We feel really proud of the work that we get to do and you know, we started this with some pretty ambitious and maybe even utopian ideas and those have ended up working out for us. So, we’re really proud and excited about that.

But we’re also fortunate to have some investors who are just great people. And folks who are a part of Kickstarter, not just because it’s a business, but because they believe in its mission. And you know, we’re fully aligned with our investors and we’re all going for the the same thing, which is you know, to try and build Kickstarter into just an amazing platform and a beacon for creativity and opportunity and people to try things out.

So, it’s always important you know, with your investors that your interests are aligned and ours very much are.

MICAH SIFRY: Has anybody who’s gotten overfunded ever come to you and said, ‘I’d like to kick some money back into a general pool to support newbies.’

YANCEY STRICKLER: People actually -- that’s been happening on its own. It’s actually a reasonably common thing that we see on the side of just people pledging to give back some of their funds to other projects and supporting others. And there’s a real healthy community part to the (inaudible) so we have no part in that whatsoever. And it’s something that’s just come up on its own.

But it’s incredible that people feel that desire and I think again, people just feel really grateful just to have the opportunity. And we do, too. I mean you know when we look around the site, I mean those of us who work here, I mean we love Kickstarter.

When someone tells me you know, I think Kickstarter’s great, I say, ‘I know, it’s awesome.’ And we really kind of feel that way. We’re honored to be able to work on it, to be stewards of this thing.

And so you know, the wonderful thing about Kickstarter having success just what it really reflects is that a lot of people are having success. We’re simply an aggregation of the creativity and the good will and the love that’s out there for a lot of people and this is happening during the midst of the economic apocalypse of the past two years. And we’re seeing that at this same time that a lot of people are really struggling, there’s still over $175 million that people are willing put into their friends’ creative projects, into the works that people that they admire.

So, you know, we think that things are so dire and that you know, the arts are in trouble in all these kinds of things, but at that same moment we’re seeing this incredible generosity and this incredible just demonstration of a desire to belong and be a part of things.

And you know, I there’s just something really human about it and you know, we are only one part of this. You know, we’re the platform where these things are happening but you know, these are the stories of individuals, you know, its’ something that we say a lot is that every Kickstarter is a story, it’s a story of a real person doing something important to them, we’re trying to make something happen.

And what you’re seeing on the side of stories of thousands and thousands of people. There have been 50,000 projects so far and each one of those is some unique effort by some individual to just make something happen and it’s creative, and it’s entrepreneurial and it’s a representation I think of some of best things that we have within us.

And so all these things together we just -- I mean we feel so lucky and so fortunate to have any part in it whatsoever. And we’re so proud of everyone who’s been able to use the site.

MICAH SIFRY: Yeah, you couldn’t have ended on a better note. We really appreciate you taking the time to sort of take us into the history and some of the inner workings at Kickstarter. It’s really, really great work.

Thank you again Yancey for giving us a full hour of your time. We are so appreciative and folks go check out Kickstarter.com and start something.

YANCEY STRICKLER: Thanks so much for having me.

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