Kickstarter's Impact On The Creative Economy
Professor Ethan Mollick of The University of Pennsylvania’s Wharton School has been studying our portfolio company Kickstarter in his research. Late last year, he published his research on how many projects actually ship after getting funding on Kickstarter (answer is roughly 90% ultimately ship). Now he’s back with another piece of research looking at the broader impact of Kickstarter on the creative economy. We know that over $2.5bn has been raised by project creators on Kickstarter to date but what we don’t know is what has happened with all of that money.
Here are the findings from Prof Mollick’s research:
The study finds that Kickstarter projects have:
- Employed 283,000 part-time collaborators in bringing creative projects to life.
- Created 8,800 new companies and nonprofits, and 29,600 full-time jobs.
- Generated more than $5.3 billion in direct economic impact for those creators and their communities.
Filmmakers, photographers, artists, authors, designers, musicians, and others reported that their project led to professional growth, greater earnings, and career advancement.
- 37% said that their Kickstarter project helped them advance their careers.
- 21% reported receiving an increase in annual earnings after running a successful project.
- 19% said they found a new job opportunity as a result of their Kickstarter project.
- 7% said their project helped them successfully switch careers.
Creators also reported meaningful professional gains within their fields:
- Filmmakers reported that Kickstarter helped them secure distribution deals.
- Musicians reported that Kickstarter helped them secure record or publishing deals.
- Video game creators reported that their Kickstarter project helped them secure a publisher or attention from reviewers.
- Authors and comic book creators reported that their Kickstarter project led to attention from mainstream publishers.
- Journalists reported that their Kickstarter project gave them freedom from the external control of editors and publishers, and helped them create work that served an underserved audience.
I remember taking economics growing up and learning that an economy can have a multiplier effect on money. A dollar in can create multiple dollars out.
And it turns out that is the case with the Kickstarter economy. So when you back a Kickstarter project, something I do regularly including yesterday, you are helping way more people than just the project creator.
And, like most things about Kickstarter, that feels really good to me.
Comments (Archived):
Amazon with a Kickstarter page now too.
I love how Kickstarter seems to be a key component in, well, kickstarting the board game industry’s rebirth and current growth.Some terrific creative stuff has come out of this low cost of entry and community involved platform.
Statistically, roughly 100% of us will die. Punctuality is the more meaningful metric and, at 65%, I’m disappointed. Where else does that qualify as success?
That’s awesome. I had the chance to meet Charles Adler, one of the founders. What an awesome guy. By the way, the multiplier effect of a dollar in the private sector is far different than in the government sector. In the govt sector, the multiplier effect is close to 0, or 0. http://johnhcochrane.blogsp…
From personal experience, my Kickstarter campaign was pivotal for my book’s production and market success. I probably wouldn’t be where I am today without it.I wasn’t part of this survey, but I would have said YESSS to each one of these:- 37% said that their Kickstarter project helped them advance their careers.- 21% reported receiving an increase in annual earnings after running a successful project.- 19% said they found a new job opportunity as a result of their Kickstarter project.- 7% said their project helped them successfully switch careers.
True but you laid a great deal of groundwork for this by what you did before. I supported your project because I knew you from AVC and your regular commenting here! And obviously many others who supported you had some reason to know of you from your various speaking engagements and participation in the bitcoin community. The overnight success was long in the making!
Correct. The timing was right, and there were several elements that were in the making, and Kickstarter sealed it and validated it. But there were hundreds of other supporters who didn’t know me, and that opened new doors subsequently.
Kickstarter opens us a lot of bridges to entrepreneurship that weren’t there a few years ago! And while it was one of the hardest things we did to vet and get Hip Money past validation and into production, it was a fantastic experience!While this data supports the results of successful campaigns, I’d add that the other biggest use of Kickstarter is idea validation/market fit! If you can put in a couple months and a couple grand to invalidate your idea, that beats the hell out of wasted years in the trenches of Entrepreneurship.
Thank you, Fred, for linking to our Kickstarter in your blog! Here’s the link in case anyone else on this thread wants to kick in: https://www.kickstarter.com…. The data you report is spot on. Our startup platform is bootstrapped (www.vproud.tv), and we were given a grant by Google to produce season 1 of our mental health/standup comedy web series, which employed 4 FTE and 20 creative freelancers/up-and-coming comedians. As a result of the exposure we received, the talent was able to increase their day rates and were booked on more jobs. Thank you for supporting the #FemaleCreativeEconomy ! Sincerely, Karen Cahn
karen, i love your project. i saw it because my friend Lindsay Campbell backed it and thus I got a mobile push notification. i tend to back 80%+ of the projects my friends back.
Fred, Was the push notification on the KS app or was it through an email? I have found it fascinating that almost all of our funding has come through friends, family, and our social circles extending out vs from people browsing around Kickstarter.
Didn’t know there were push notifications. That’s what I get for being a desktop dinosaur. Very coolToo bad it’ seems to be facebook friends only.
What is Kickstarter’s share of this overall pie? Then we can extrapolate an even bigger number pertaining to the overall creative economy.
5% of 2.5bn over seven years
Not the % transaction part, but overall market share wise.So suppose Kickstarter is 25% of this segment, this means there is another $7.5 Billion being funded, and $5.3 x 3 = $15.9 of economic impact. (assuming these other projects are of the same quality)
For what they do that is way to low. Now that they are a mature and established business they need 6% or maybe even 6.5%. Even with the payment processing fees that still keeps you below 10% in total costs. I can’t see the demand changing given the maturity of the market. Inelastic. Or they could raise money by charging other % fees (small amounts) for certain extended services (such as help in managing the project in some way).
There are two pieces to Kickstarter’s magic.The first that as a platform it can unilaterally find a market for both @ccrystle:disqus community garden fence for $3K and my friend Brian Fargo’s InExile games which have raised millions to rebuild the classical games I was raised on. An impossibility actually but it works.And it has changed the web, the first platform that didn’t aggregate community but was a transactional focus point for the fact that community exists cross all the nets, not on any one.That’s magic to me.
Pretty great. As tends to be with KS.
Yes! Great job, Kickstarter.Here’s the last project I backed, they’ve got 16 days to go: https://www.kickstarter.com…
Anne I”m so glad you posted this – just donated to this project! We are all about the #FemaleCreativeEconomy, so this is perfect for us.
Wonderful, Karen!
Remarkable stats on a true economic driver. This is one of my favorite kickstarter projects that could change the landscape of hotels: http://kck.st/2aDxgJa
+100 for having a Frederick Buechner quote on the project page.
I think this intuitively makes a lot of sense. A lot of creative professionals (my brother is a musician) are averse to “selling out” or “going corporate” or similar. Kickstarter is the opposite of selling out. Despite this, it provides creative people with the structured path to do all the important marketing, connecting and building community that corporate America figured out and provides for celebrity creatives.
I was wondering what people do who want to do a kickstarter project but don’t have the skills (or the time) to put up a compelling kickstarter pitch.So I searched for “help with kickstarter project” and “kickstarter consulting” and pulled up a few companies with adwords ads but nothing that gave me the impression that there was money to be made in helping people with projects. That’s not that surprising considering the fact that people go on kickstarter to raise money (and are probably short on funds). Still it seemed that there would be a developed network of people that are willing to put together the pitch similar to the scores of people that are around (of varying degrees of skill) that will help someone put up a simple web page. (Or drive a car in their spare time).
Glenn Fleischmann has written some good material on this subject: https://medium.com/swlh/eve….
Sure but (along with my other comment) that requires reading and DIY. And if you read something that long you will have questions and have to read more. This is like deciding to build your own deck vs. hiring a contractor. People who want a deck who don’t want to DIY. What do they want? They want a guy and a truck to show up, give them advice and a price, answer questions, and then do the work. Permits, plans, material, labor and most importantly confidence that all of their needs are met with good quality work (good luck with that…)
@clayhebert helps entrepreneurs with Kickstarter projects and he has a ton of good information on his site – see his free class, for example https://www.crowdcast.io/e/…
Yeah but that requires thinking. And in checking his web page he is selling information not handholding and end to end management or a solution. Note link “speaking” at the top:http://clayhebert.com/I am talking about “don’t make me think” not “here is something to read”. (Sorry the way that comes across…)
I remember taking economics growing up and learning that an economy can have a multiplier effect on money. A dollar in can create multiple dollars out.The multiplier is great. But the best benefit is if money comes from somewhere that has no geographic link to where the money goes. So for example Brooklyn makes out very well with Kickstarter being located there because money comes to Brooklyn from all over the world. It’s not another restaurant in Brooklyn taking money from an existing restaurant or supermarket. [1] It’s not another loaf of bread on the shelf taking dollars from a company that it replaced.[1] I was thinking about this relative to how I make money. I take in dollars from all over the country (and the world) and I spend those dollars in our country (car being an exception) [2] and also in my local economy. My wife on the other hand gets paid with dollars for doing a job which is local. So the money she spends would simply be spent by someone else doing that job. [2][2] Local dealers get part of that money as well as the US dealer support system.
Here are some thoughts on Logistics for Kickstarter projects https://medium.com/the-crow…
Is there a blockchain for this yet?
there will be, for sure.
completely lost on how that would work
presumably fees would be lower, so either KS gets more margin or creators get more money.
Pushing the Innovation economy forward is critical and KS is certainly helping!
One heck of a good batting average.Now, how to get that batting average for projects that make money?
.The multiplier impact is the adult element at work here. This is capitalism and this is good. While the multiplier is significantly stout as quoted, I suspect it is really much higher as some of the projects are simply not in that category.This is a sound thing.This is the same principle upon which the SBA (small business administration) is based. The SBA is a loan guaranty program meaning the gov’t guarantees repayment of up to 85% of principal loaned.The SBA runs out of allocation in Q1 of every year. It should provide unlimited guarantees (this is no money, this is a loan guaranty, much different).If this were done, it would create a million jobs a quarter [I picked that number out of a sack of marbles on my desk but you get the idea.]Well played. Very well played.JLMwww.themusingsofthebigredca…
Kickstarter, sounds like a wonderful company and they are right about the multiplier effect.
Nice! Get a plot of ground likely already close to being a good garden. Likely get some advice on how to test and improve the soil. No doubt get advice on seeds, planting, cultivation, weed, insect, and disease control. Get some protection against hungry furry animals, birds, etc.!Then, get to join a community, that is, have a social activity, in an informal, old clothes, dirty hands work environment with people with similar interests. Ah, birds of a feather! Is your plot tracking resulting marriages? Babies? Babies that grow into gardeners — recycling?And, last but not least, get some fantastic tomatoes, corn, garlic, raspberries, carrots, etc.! And, for the plot with the best raspberries, at the “fleeting moment of perfect flavor”, get to bring lots of sugar, cold heavy cream (say, 40+% butter fat content from local cows!), paper bowls, and plastic spoons and get the pride of being the leader in the giant community raspberry feast!Dad told me the secret of really good sweet corn. But first, the challenge: Once pick the corn, some enzymes start converting the sugar, GOOD, to starch, less good. So, for perfect, i.e., sweet, corn on the cob, first have everyone sitting at the dining room table. Have lots of salt and soft butter on the table. Have a pot of 2 gallons or so of salted water boiling on the stove. Have on running shoes. Have the kitchen door to the outside propped open.Then leave for the corn field. Pick the corn. Run ASAP back to the kitchen shucking the corn cobs while running, and dump the corn in the pot. Serve the corn!For your garden, bring to the garden, say, a propane fired set up intended for deep frying turkeys except in the pot use just salted water; also have the butter, salt, etc. Then pick the cobs, …, and get the pride of having the sweetest corn on the cob ever! For the leftovers, the cobs and what shuck from them, deposit in the compost pile!
That’s quite a leveraged impact out of $3K. How many total backers did you have?
Do you think Kickstarter was the right venue given the nonprofit aspect (I mean it worked in the end, so oddball question, but still, larger space for nonprofit questions)
Hmm … “Organic”? What is the punishment if someone sneaks in box of, say, Miracle Gro? A cup of ammonium nitrate pellets? A gasoline powered cultivator? Some GMO seeds? A little spray bottle of Roundup? Some bails of peat moss? Down south it might be a load of rotted cotton seed hulls! Ah, mass, community ostracization?I’m lusting! Lusting after red or black raspberries with lots of sugar and some of the local, right off the top of the milk can, 40+% butter fat whipping cream! Or over pound cake and ice cream and washed down with Asti Spumanti!Ah, before that, some of your best bread with some local goat cheese, say, rolled in herbs! With some local Pennsylvania red vinifera?There’s a packing house in PA that gets a lot of NYS retired dairy cows. So, get a big box of shin bones, get out Escoffier, and make some terrific brown stock!Since you are a gardener, my push Briggs and Stratton mower quit — THUNK. It has the old 450 series flat head, 148 cc engine. No compression. Head off, the intake valve and its seat were heavily coated with burned gunk. The exhaust valve was fine. Still, the intake valve would not even close down on the gunk. There was evidence that things were broken down in the crankcase, with the camshaft and/or lifter. Engine had less than 100 hours on it.Guess: The crankcase breather tube feeds into the carburetor. Hmm … So, crankcase gunk goes past the intake valve. So, over time, the valve was held away from its seat by the gunk. So, the gap in the valve train opened up to too darned large. So, each time the intake opened, there was a big shock in the valve train. Well, the camshaft is, right, plastic! With the shocks, something broke.So, I got a new one, 450 Series, 148 cc, simple, push style.First, let the breather tube open to the air. Plug up the hole in the carburetor intended for the breather tube.But, the handle height was fixed and way too low for me. So, got some aluminum stock and made a brace from the right side of the handle at about the middle down to a connection just to the left of the right front wheel. Now, from working till midnight last night under a flood light, the handle is the height I like, 40″ from the ground, and really solid, e.g., making it really easy to raise the front wheels to turn!So, with “some special modifications I made myself”, this weekend can get some exercise and get caught up on the grass mowing!If you have one of those B&S engines, either keep the oil darned clean or maybe let the breather tube open to the air like breather tubes were for nearly 100 years! Also, maybe go to the trouble to check the valve lash, get a torque wrench and a set of gaskets, pull the head, and inspect the valves. If they are not clean, then have the tools to do a classic valve job.Now to remove the old oil, have to pour it out of the filler hole. So, they saved $1 by eliminating the crank case drain plug.
But pig manure…..