It was a big week for our portfolio company Kickstarter. In the span of 24 hours, not one but two projects passed $1mm in funding. Co-founder Yancey Strickler wrote a great blog post laying out the timeline of those 24 hours.
Even with all the press about Kickstarter in the past year, I feel that it remains quite misunderstood as a service and a business. One of the best explanations of Kickstarter I've seen is a talk that Yancey gave last June at Creative Mornings.
If you have 30 minutes this morning to watch some video, I think you'll find this quite interesting and useful to understand exactly what is going on with Kickstarter.
You know how much I love film! and this year at Sundance there were numerous films financed through kickstarter, that weren’t there last year of course. As a film financing model kickstarter is truly outstanding. For products and other things its also amazing. Coming from a film background I dream of the day when kickstarter funds a pretty decent sized film, $5 – $15 million. Its bound to happen. Loads of film people talking about it. Its funding numerous shorts, features and documentaries, in the smaller budget realm but soon a nice size film will happen and that will shake up the film industry quite a bit.
seeing a video game studio raise $1.6mm (to date) from 46k fans (to date) should wake up a lot of film makers to the potential of kickstarterhttp://www.kickstarter.com/…
That’s the filmmaking dream!
Fred- I think a lot of film makers are aware. I posted an ad to CL last week looking for help with a video we were doing. Over half of the respondents had a kickstarter video in their portfolio, either for something they had done for themselves, or were employed by others to do. I was surprised by this. One person in particular branded herself as the person that could produce a video to get your project funded, she included her stats. The signature of her email was a “how-to” for getting projects funded on crowd-sourced sites.
That’s a good sign
Almost 10% of the films at Sundance this year received some form of Kickstarter funding!http://mediadecoder.blogs.n…
I’m working with a veteran Hollywood person (did “Secretariat” and “I love you man”) who is doing exactly that. Crowd funded films. Right now the issue he is working on is how not to piss off the existing players.
Kickstarter is at the front of the biggest wave of all: Individuals using the web to turn passion into reality, reputation into revenue, and mind into money.It’s the next phase, guaranteed to be bigger than all before it. Entrenched, monied-powers will fight it, and lose. The era of the empowered individual creating wealth is upon us, and kickstarter is one of a growing few forging the way. I CANNOT wait to join them!!!
a manifesto for sunday morning!
Can you suggest timing for a start-up to get “kicking” on Kickstarter? A few key metrics to suggest besides passion for a project and a plan? Thanks (-:
when you have a project that is crowd worthy
…a project that is crowd worthy and (can be) funded to completion….the cost isn’t always inherent in the “crowd worthy” metric…no? Thx (-:
“…using the web to turn passion into reality, reputation into revenue, and mind into money” is a huge combination of virtues. Are you able to sum up the “right time” to present on Kickstarter? Can you verbally advise as to timing to get kicking on Kickstarter?Thanks in advance for your thoughts!
There are so many places that we need platforms to help us do this: entrepreneurship, investing, education. Empowering individuals to create wealth will build a more prosperous world for all. That’s a future we could use right away. 🙂
Prior to that, we need to agree on new definitions of prosperity and wealth. What got us here is not going to get us where we need to go.
Hours later and I still can’t figure out what you mean by this.
=] A little obtuse, I’ll agree.I’ve been reading a lot of Oliver James (Affluenza) and Alain De Botton (Status Anxiety), which has lead me to the following belief: as we go about bringing new prosperity and wealth into the world, we need to take a long hard look at how we’ve come to define “wealth” itself. Time spent with the ones we love versus endless dividends paid to shareholders.The two don’t have to be mutually exclusive, but the way we run the world right now skews us much to far to the latter end of that scale, the net result being an infinitesimal and short-lived benefit to a handful of people, one that doesn’t actually bring with it long-term happiness.It’s a little hippy for a VC blog I know, but for me it is all part of a larger conversation about the things we value, and how we start to shift society as a whole to a more balanced point of view on what constitutes genuine success. Once we create demand among society for that new way of thinking, our institutions will have to follow suit.
Different people define life differently, so I’m not sure we can collectively define this.I was definitely speaking in a monetary sense, because that’s a great placeholder. With enough monetary resources, an individual should be able to choose to do or experience whatever else defines “real wealth for them.”But it’s true – money is nothing more than a placeholder. A means to an end.I know what I want to do with mine when I earn it. It’s all about experiences with my wife and two awesome kids, building knowledge about things I’d like to learn more about, and making a big difference in the world.Money is just a means to that end. And my life will still be rich if I never am.
I agree, the metrics of what “value” is will change. Michael Porter, HBS, coined the phrase, “creating shared value”–creating economic value while also creating value for society…connecting corporate success with social progress…but not as an add-on or at the margin and not as philanthropy. Porter states this will be next major transformation of business thinking. Check out: http://hbr.org/2011/01/the-…
Would that there were such “endless dividends paid to shareholders”. Then more shareholders (including workers who socked money away in stocks and funds for years) would have more income, and more time to spend with loved ones in retirement. That would be capitalism, a system nearly all of us could participate in to some extent.But most public companies aren’t really run that way: many pay no dividends, and, of the ones that do, most pay paltry ones. Many are run more for the benefit of their senior executives than their owners. The problem there isn’t too much capitalism, but too little.
A true meritocracy.
Hope kickstarter considers opening to foreign bank accounts as well.I’m sure that brings a whole list of complications… but it’s a great idea and can see it doing very well!
they very much want to. they have a tricky payment model to begin with. but they will get there
Very inspirational video. “Every project is a story” is an amazing kicker, and the best part is when the story becomes a reality, there’s another follow-on story that’s even better (i.e. the examples that Yancey gave about stories that touched him forever).I think it could have been called “Dream Starter” because that’s what it does.
Love that Yancey emphasized on the fact that Kickstarter is less about The Community in general but that each project in itself enables a community, the project creator and the backers. This is a powerful relationship.
I heard that as well but think there is a larger community thread that is latent and powerful.My gut, based on my own and friends experience, is that the act of supporting ties people together cross project as well.This is something that can be built on I bet.
You are right, Arnold.
Hey I just noticed one of your fellow SoundClouders Tomás Senart is behind Sight, a code highlighter chrome extension. Love it! Just pinged his issues on github about potentially supporting textmate bundles (in particular coffeescript).
I didn’t even know, that’s so cool
Great point about the bonus emotional value that comes with each story… Interesting to see that this aspect was so ingrained into their vision from the outset. I could see some very commercialized versions copying this model, but that aspect will be near impossible to replicate.
Exactly. I think they own that space now.
Ingrained vision. Arts, people, creativity – but “a project has to be finite”.
www. fuckyeahmostimportantcompanyontheinternet .com
i thought that was soundcloud 🙂
Oh I didn’t know I was allowed to pick my own company 🙂
Amazing what a community can do when pulling together.
Supporting inspiration is personally empowering. Kickstarter touches that in me.At the beginning stage for startups, the same is true for early adopters supporting you with their time. People are buying into your inspiration, your promise.
Incredible company. Even the name is perfect. I’m so happy to see it gaining in strength. There are so many opportunities with the model to give people tools to really change their lives.
I think Kickstarter is a great company. They have had amazing success. But I am frequently on the sidelines watching rather than participating. I wish that it offered a true means of investment in the companies that use the service.I believe the only Kickstarter that I have participated in was the Glif. I may be off, but I am pretty sure that was one of, if not the first, really big kickstarter success stories. Their video was amazing, the team communicated extremely well with the people that pledged them money, and in the end they shipped a product exactly as promised. But it turned out, that I really didn’t need the product, and it was lost in our apartment within a few days.What I much rather would have done was invested a larger amount of money and instead of receiving 1 product, receive part ownership in the company. Kickstarter to me just seems like a raw deal for those that pledge the money. That may be extreme, but if all you get for putting up money ahead of time is one of the first items off the line, it just doesn’t seem worth it to me. As it stands now it seems very much like the vinyl pre-orders that independent record labels have done for years. Pre-order the record and get it on limited red vinyl. Or wait until it’s fully released and you get it on plain old black.I know that I may be in the minority here, since KS is having plenty of success with the model exactly as it is, but I hope that either they or some other company comes up with a means to true early stage crowd sourced investment.
There is a company doing just that called ProFounder, founded by the founder of Kiva.org https://www.profounder.com/The trouble they have run into is that business laws and regulation do not allow for micro-investments to take place easily. Read the FAQ page on the ProFounder site to get an idea of how complicated it becomes compared to Kickstarter. They even have different FAQs for all 50 states in the US, since business investments are regulated differently on the state level.No wonder they are in Washington along with Steve Case trying to change laws to allow for crowdsourced investments.
Thanks I will check them out. I have no doubt that this type of thing would be incredibly challenging. 50 different FAQs sounds like the tip of the iceberg, doesn’t even include international.
There are equity platforms out there. Sounds like that’s what you are looking for
Has there been a novel published?Major implications for that biz.
Many. http://www.kickstarter.com/…But I don’t think it has the implications you might think for the publishing business. It was already relatively cheap to self-publish on the internet before Kickstarter. The publishing business brings distribution, promotion and editing which Kickstarter does not solve as well.
Thanks.Maybe publishers should look at Kickstarter as their minor league system.
100% agree. They are looking for pre-built audiences. Just look at all the blogs that have been turned into books.
erase publishers and change it to “content producers” (include in tv, film, books, magazines, all sorts of stuff) and I think you may have a good system.But, would someone who is successful in the minor league really need to move up to Mainstream Media Major League?
“We like your blog and want to pay you $100,000 to turn it into a book. You will be in every bookstore in the country.”How many writers turn that down?
For paycheck and more exposure, some will want to.
terrific – love this service and story!
When I go to the movie theater I pay for my movie ticket before I get to consume the product. If I subsequently find the product to have been deficient I can’t ‘return’ it for a refund or exchange.Are Kickstarter projects like going to the movies?
I think for this reason Kickstarter has (so far) been very selective about what projects they allow and what projects they feature on the site. I thought it was overkill, but perhaps careful quality control has served them well. Similar to facebook, they have forsaken higher revenues in early years in favor of keeping the user experience good and a real longer term vision.
For this reason I wonder if the KS model is going to be truly one for the masses going forward?Cherry picking works, but at scale rather difficult to get right.
I think it’s a good question. As far as I know, sites like indiegogo are doing well and it’s also possible many verticals will have their own fundraising sites. I do think KS has built a powerful brand and as the number one person in this domain may control a lot of the market, the upside is pretty big. I agree it’s unclear if the success of large projects will translate/trickle down the long tail.
In many cases it is like pre-ordering a product. I have seen some projects that allow for returns if you are not 100% satisfied with your purchase, but they are probably in the minority.
I wrote this in a post I wrote in January, and I mean every word of it:”Kickstarter embodies everything that is good about the American spirit. It is an enabler of ideas, making it possible for individuals or small companies to bring those ideas to market through revenues (not debts or capital). And this — helping ideas become products — is a noble endeavor.”
Replace ‘American’ with ‘Human’ and I’m there.
Yeah… I can live with that. 🙂
Both statements would be true, but it’s always good to remember that those kinds of values are nearly universal on our small planet.I have seen them in the cab drivers of Paris, in the boys selling sticks of gum in Addis Ababa, Ethiopia, and in the street vendors of Seoul, South Korea.In all of those cases, I met people who looked up to America as the land where entrepreneurship is not just a way of life, but is lionized, taught, encouraged and often richly rewarded. They see us as the nation of Bill Gates, Steve Jobs, Mark Zuckerberg, Jack Dorsey and Vinod Khosla.May it ever be so.
So well said Aaron.I can take this both ways equally as well.But I know from friends in New Zealand and Portugal who had film projects that the idea of Kickstarter is something they are truly waiting for.
Great comment, Aaron. I especially like “where entrepreneurship…is lionized.” That is part of our legacy as a nation… and the way that other nations see us does give us a lot to live up to. I’m hoping to see entrepreneurship in this country go to a new level. However, not just in the U.S. but in the world at large. I think crowdfunding is a huge part of making this happen. I do want to say that one of the things I appreciate about AVC is the opportunity to hear from entrepreneurs from around the world. I appreciate the qualification that @awaldstein:disqus made.
You and @awaldstein:disqus would greatly enjoy Sarah Lacy’s book, “Brilliant, Crazy, Cocky: How the Top 1% of Entrepreneurs Profit from Global Chaos.”http://amzn.to/xrq3lqShe follows the story of entrepreneurship around the globe…South America, Indonesia, India, China. Amazing book.
Ordered! Now I know what I’ll read next time I’m on a plane. Thanks, Aaron.
I have not followed news, just saw headlines that Obama white house is pro crowd funding.http://bit.ly/zjSt5B
For backers, Kickstarter seems to be in the business of selling experiences. Are the higher tier rewards more likely to be an experience than a physical good? Even with the lower tier rewards, it’s not about the physical item you get for backing a project, but more about the story behind how you received the item and how you can continue to share that experience with people each time you retell that story.
Kickstarter seems to truly be coming into its own – and now it’s enabling ideas that go beyond game, music, film and project creation. It’s enabling Change.One very good example is the CASH Music Platform Kickstarter: they’re a non-profit out of Portland, whose goal is to build a complete open-source platform of tools to enable to musicians to sell, share, & promote their works as they wish.For free. Without middlemen.For musicians, a platform like this will be HUGE.Their board is full of notable names (Dave Allen, Zoe Keating and many others) – and as of now, less than four days in, they’re 2/3rds funded with a $30k goal.The most amazing thing: they haven’t even sent out their press releases yet. This thing took off all by itself.To me, that’s the true power of the Kickstarter Idea: true crowdsourcing. If an idea is good, it can catch fire all by itself.Fred, you picked a fine idea to back in Kickstarter. (Thank you.)
I think what we need is an “AVC Community” on the page for “Curated Pages” on Kickstarter.http://www.kickstarter.com/…
I think there needs to be more community driven pages, irrelevant of community 🙂
Thank you and well done Kickstarter! Demonstrating the power of crowdfunding, creativity and community to change the world. Genuinely representative of “The Crazy Ones”.We picked up the wave and built a UK-based service: http://www.bloomvc.com Still in beta, but the first project is fully funded so spreading the word… #crowdfunding *is* the future.
The Double Fine Kickstarter has been the talk of the indie games community for the past week ($1.6M+ raised as I write this), but its success reminds me heavily of the Louis C.K. post that was on this blog a few weeks ago.For those who do not follow games the man behind Double Fine, Tim Schafer, is a demigod. He worked for LucasArts in the 90s and created some of the most loved adventure games of all-time (Day of the Tentacle, Full Throttle, Grim Fandango). For gamers, this is a bit like Jonathan Ives kickstarting a cell phone.Like the Louis C.K. example, these are two people who became famous through established publishers/distribution models and are now using that fame to raise money directly from an established fan base.I’m not saying there is anything wrong with this. In fact, I think this is fantastic. But what does it mean for the next generation of talent?What happens when the front page of Kickstarter is made up of established filmmakers, musicians, authors and artists? Will we have simply traded one gatekeeper for another?EDIT: Jonathan Ives should totally kickstart a cell phone.
Personal guess: the fame passes onto a new generation crowned by the older one. The older ones are still tastemakers with money (unless there is a big social revolution around this sort of stuff)
Personal brands will have disintermediated the old system and a new one will replace it. Don’t see how content creators can be considered gatekeepers in this context.
The two personal brands in my example were both created in large part through the old system of distribution and promotion. I’m wondering how that is overcome in the future (i.e. with the next generation).I was calling kickstarter the gatekeeper in the second example. They have eight featured projects on the homepage at any one time and they are chosen by the kickstarter editors. Very different from publishers of the past but a gate nonetheless.
Two comments:First, the commitment to allowing artists and designers to remain authentic to their visions is so palpable in Yancey’s talk, including in the, at first, surprising, and then, obvious decision to keep charity projects off the site. Very inspiring!Second, Kickstarter is one of a wave of solutions that are drawing more folks in as producers, and creating better results (better performance and/or more inspired output) by more directly linking users and producers, and putting the focus on more raw output by disposing of the various inter-mediating artifacts of our world — credentials, associations, static reputations, or third parties — that distort what producers create and users consume. These platforms also give the producers tools and processes to encourage and push them to refine their vision into a tangible product. I coincidentally posted about this last night and would love any feedback that anyone has :-)http://takingpitches.com/20…
Thank you for this post concerning Kickstarter. It helped me understand why my project, Veteran Sherpa, was rejected.
Why was it?
After watching the video I now understand that Kickstarter is focused on creative arts projects. I also made the following mistakes:Too much of a business proposalNot creating an eye catching zany video Appearing as a cause Veteran Sherpa is a social media aggregator that helps vets find information on benefit and employment topics.
‘Pre-ordering’ and ‘threshold’. Those were the two key terms in Yancey’s talk for me and what I, as a musician on the come up, have been thinking about in particular. Looking at those two terms differently, one can think of the company as doing two thing:Threshold = Kickstarter eliminates the fear of financial failureandPre-ordering = ‘Kickstarter validates one’s creative pursuits’Everyone knows the fear of creative failure is crippling for many people as is. Leaps of faith are that little bit easier knowing, at worst, you may fail at your dream but you won’t be financially ruined, too. At the same time, the fear of failing at your dream is negated somewhat by people being prepared to pay for your creation before its even ready – if that’s not validation, I don’t know what is.
It’s really exciting to watch the growth of Kickstarter!
There are great ideas, and there are great ideas that help others create great ideas. When you have the latter, I don’t think you should give it up. I enjoy in Kickstarter’s story that the owners met at “Diner” in 2005, weren’t technical, worried everyday about someone in Silicon Valley doing the idea, had all kinds of hang ups and stumbling blocks, and stuck to it until they opened the site in 2009. I dig that, and a buddy took me to “diner” last time in Brooklyn (cool place, good food).
Yeah. The story of how it came together is great
Interesting to note – a client meeting with over 30 people in it the other day – about half didn’t know what Tumblr was but almost everyone had heard of kickstarter.
That’s strange. According to Quantcast 132mm people a month visit Tumblr and its the 15th most popular website in the US while 3.5mm people a month visit Kickstarter and it is the 712th most popular website in the US
@fredwilson:disqus @leigh:disqus I think that in certain communities like filmmaking, music, or arts in general it makes perfect sense that Kickstarter has much greater visibility. Also worth noting that while the barrier to entry on Tumblr is basically zero (and therefore used by loads of people without any actual thing to say), Kickstarter requires some thought and effort to create a project and then hard work to promote it.Tumblr is clean and beautiful and fun, but has such narrow functionality that its appeal is greatly lessened if you’re actually trying to disseminate information vs. microblogging your stream of consciousness. I’d never use Tumblr as a platform for a movie or indie album production, for example. Pertinent info would get buried because of its linear “path”.
132mm people, or 132mm visits?How many unique accounts does Tumblr have, 132mm?
UVs so peopleTumblr stats are public atwww.tumblr.com/about
it was a less a comment about tumblr then it was a reflection on how much kickstarter has become important in the media world
i understand that, but it still strikes me as strange
sounds like a branding issue. no doubt those people have been on a tumblr blog and not realized it.
Fred, Thanks for posting the link to the video. Crazy that projects are now getting 1M through KS. This is news! Great, great, great!
Beyond the tremendous value that KickStarter’s portal provides, there is a strong undertone illustrated here – the convergence of business and social!The fact that people are embracing this site demonstrates in part, social’s intersecting value.
Kickstarter is a great platform for a variety of reasons.1. Can do a cursory assessment for demand2. Can create a collaborative creative connection with donatorsMy friend’s kickstarter project, making wooden board pieces for the settlers of catan game (he was frustrated with the cardboard ones never fitting together properly), used kickstarter to see whether or not there would be demand for his project even before doing any actual production (he made a video).And the recent $1m Double Fine Adventure game, along with the documentary, can allow all donators to be intimately part of the creative and production process.Fading into the past is the old model where visionaries with successful track records control the entire creative process without any cursory assessment of how it will be received by the general public/market (though not always a bad thing: Steve Jobs, Hayao Miyazaki, The Beatles). One alternative to this, however, is a future where all stakeholders can have some influence in the final product—games, stories, comics, movies, etc., through this two-way collaborative communication channel (needs to be smartly implemented and frictionless).Excited for kickstarter!
Bookmarking the talk for when I have time (and the mood) to watch. I love KickStarter for what it can do to transform an idea into reality. If I was more cash rich I’d be a supporting junky for sure. update I became massively less productive and watched the videoCongratulations to the team they’ve put together.Tip of the hat to RocketHub, another crowd funding company that’s cofounded by an AVC community member Vladimir Vukicevic. They’re not quite at KickStarter mega funding level but they have been serving their community of creatives and artists passionately for a couple of years now. To see creative projects fueled is inspiring.
He is very articulate. I enjoyed the entire video and it did help me know more about what works and what doesn’t. I am going to try posting a project involving rail travel in the US.
Kickstarter is one path to demorcratizing capital. People are learning that they can empower growth. It’s not up to the big boys anymore. It’s up to us.All of us Lean forward
It is most definitely not about the boys anymore
My MacBook Air is in for service. I’m reduced to using my Android or my wife’s iPad for everything right now.One thing that’s really annoying me right now is the mobile version of Disqus.The biggest thing missing is the number of likes on a post. It’s surprising how much I use that when I “stop in at the bar” to instantly understand what is “resonating” while I’ve been out.Also, no way to tag anyone easily. I think the syntax might be @disqus:twitter (we’ll give it a shot) but I miss not being able to tag people without remembering user names or syntax.The “mobile first, web second” world has some work to do… 🙂
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I was joking with my wife the other day about creating a Kickstarter to fund a new NFL team in Los Angeles. Maybe I should do it…
I’m long on kickstarter. Actually my Kickstarted wrapped up last week with 260% funding! I was excited when I got an email saying Fred Wislon was backer…. turned out it was some other Fred Wilson… from michigan.
I wonder about the scalability of kickstarter. The cream will always rise to the top, but if you are not a staff pick or featured, then you really need distribution to get your message (url) out there.I was fortunately enough to be pushed by Seth Godin but there are alot of other amazing projects on KS from people will less social clout.Visibility is a finite resource on kickstarter. Could they really support 2x the projects without signifigantly lowering the project success rate?
The issue of visibility, not unlike the new ‘highlights’ feature on Tumblr discussed here last friday.How to get noticed is everywhere.
what’s interesting is the the project success rate has remained almost constant as the volume of projects and funding has ramped over the past three years
Amazing… So exciting. A new paradigm of capitalism unfolding before our eyes.
they don’t do charity or equity. they occupy the space in between those two funding models
Kickstarter is seems more useful for founders/entrepreneurs than investors, in the sense that it could be used as a low-risk testing/Customer Development platform for creative endeavours (ie. the TikTok).
I sincerely hope they always stay out of the equity business.They don’t just “occupy” the space between, they created it. Awesome to watch.
That’s a great sweet spot to be in and a void that’s perfect for reaching online audiences very efficiently.
Here is a list of sites that do fill the equity niche. http://www.xmarks.com/site/…
yancey give a great answer to that in the first question he takes after his talk. it’s about 15mins into the video
awesome point Andy – totally agree ..stay out of equity and on othe end of spectrum ‘fund my life’ activities.
indeed. there was a company called speaker text that was trying to do that
@fredwilson:disqus Speaker Text is no more?
@fredwilson:disqus OK, interesting. Thanks. Seems a little like Mechanical Turk now.
Check out 3Play Media
that is really at the heart of our investment strategy. we look for those types of founders.
Very well said. You need a deep rooted conviction about something that’s profoundly different, and you need to clearly communicate it and then go make it happen.
the greats have a different internal representation
i feel like i’ve written on that topic before. i will see if i can find it.
it became humanoidhttp://www.crunchbase.com/p…
Agreed. This should be a simple way to fill another niche that has a need.