What I Have Learned From Kickstarter
Today, Perry Chen announced on the Kickstarter blog that he’s moving up to Chairman and that his co-founder Yancey Strickler will step into the CEO role at the start of next year. Like all things that involve Kickstarter, this is a classic Perry move. Perry and Kickstarter have always done things their way, and today's news is another example of that.
As I reflected on this change, I started thinking about all the things that Perry and Kickstarter have taught me. I believe that entrepreneurs teach VCs and Kickstarter has been full of important lessons for me.
Maybe the most important lesson I have taken from Kickstarter is that you have to build your company in your own mold. There is no one right way to do it, as much as the advice giving pundits (me included) would tell you otherwise.
When Perry came to see me in 2009, just after they had launched the site, he said he was wary of taking money from VCs. He said he had no intention of taking the company public and no intention of selling it. He wanted to build a long lasting sustainable business that would always put creators first and serve as a resource for the creative community to get funding for their work. He saw the race for the big payday as orthogonal to his goals for the company and wanted no part of it. I understood the argument but wasn’t sure Perry really meant it. We invested anyway, because we believed that a network/market based approach to funding creators made sense and that it would be a good business. It does make sense and it is a very good business. And, as it turned out, Perry did mean it.
Kickstarter has been profitable from shortly after we invested. It has never needed to take outside money and it has not done much to optimize its profitability. The profits have been spent investing in the team and more recently in a new headquarters in Greenpoint, Brooklyn that will open next month. Instead of agreeing to pay sky high rents and sign a long term lease that the Company would quickly grow out of, Perry chose to buy an empty old Pencil factory on the waterfront in Greenpoint, Brooklyn and spend the Company’s profits fixing it up and making it into a physical instantiation of Kickstarter’s role as a resource for creators. They will be their own landlord.
I suspect that Perry could have bootstrapped Kickstarter without VC and maybe he should have. But I am sure glad he did not, as we feel incredibly fortunate to be along for this ride. Networks and markets are slowly changing the global economy and the creative sector is at the forefront of these changes. Instead of going to Hollywood studios for the funds to make their next movie, directors are choosing to harness the network of their fans. Instead of going to the publishing industry for their book advance, authors are choosing to harness the network of their fans. Instead of signing a deal with a record label, musicians are harnessing the network of their fans. The same thing is happening with comic books, video games, theater productions, and many other creative endeavors. Kickstarter has changed the way creative projects come to life.
Four and a half years after launch, Kickstarter is a very important and sustainable business. It will continue to grow, it will continue to fund creativity, and it will continue to do things its own way. Kickstarter was built in Perry’s mold and the unique culture and mission of the Company are derived from him. I suspect his decision to step up to Chairman and allow the team to run the business day to day is Perry’s way of saying to the team that they have his confidence to lead Kickstarter into the future. Kickstarter will always be Perry’s work and we are very happy to be a part of it and be inspired by it every day.