Kickstarter

Kickstarter

Headquarters	Brooklyn, New York, U.S.
Founder(s)	Perry Chen Yancey Strickler Charles Adler
Website	www.kickstarter.com
Alexa rank	392 (December 2015)[1]
Type of site	Crowdfunding
Launched	28 April 2009

Kickstarter is an American public-benefit corporation^[2] based in Brooklyn, New York which has built a global crowdfunding platform focused on creativity.^[3] The company’s stated mission is to help bring creative projects to life.^[4] Kickstarter has reportedly received more than $1.9 billion in pledges from 9.4 million backers to fund 257,000 creative projects, such as films, music, stage shows, comics, journalism, video games, technology and food-related projects.^[5]

People who back Kickstarter projects are offered tangible rewards and one of a kind experiences in exchange for their pledges.^[6] This model traces its roots to subscription model of arts patronage, where artists would go directly to their audiences to fund their work.^[7]

History

Kickstarter launched on April 28, 2009, by Perry Chen, Yancey Strickler, and Charles Adler.^[8] The New York Times called Kickstarter "the people's NEA".^[9] Time named it one of the "Best Inventions of 2010"^[10] and "Best Websites of 2011".^[11] Kickstarter reportedly raised $10 million funding from backers including NYC-based venture firm Union Square Ventures and angel investors such as Jack Dorsey, Zach Klein and Caterina Fake.^[12] The company is based in the Greenpoint section of Brooklyn.^[13]

Andy Baio served as the site's CTO until November 2010, when he joined Expert Labs.^[14] Lance Ivy has been Lead Developer since the website launched.^[15] On February 14, 2013, Kickstarter released an iOS app called Kickstarter for the iPhone.^[16] The app is aimed at users who create and back projects and is the first time Kickstarter has had an official mobile presence.^[17]

On October 31, 2012, Kickstarter opened to projects based in the United Kingdom,^[18] followed by projects based in Canada on September 9, 2013,^[19] Australia and New Zealand on November 13, 2013,^[20] and Denmark, Ireland, Norway, and Sweden on September 15, 2014.^[21] and in Spain on May 19, 2015.^[22]

Model

Kickstarter is one of a number of crowdfunding platforms for gathering money from the public, which circumvents traditional avenues of investment.^[23][24] Project creators choose a deadline and a minimum funding goal. If the goal is not met by the deadline, no funds are collected, a kind of assurance contract.^[25] The platform is open to backers from anywhere in the world and to creators from the US, UK,^[26] Canada,^[27] Australia, New Zealand,^[20] The Netherlands, Denmark, Ireland, Norway, Sweden, Spain, France, Germany, Austria, Italy, Belgium, Luxemburg and Switzerland.

Kickstarter applies a 5% fee on the total amount of the funds raised.^[28] Their payments processor applies an additional 3–5% fee.^[29] Unlike many forums for fundraising or investment, Kickstarter claims no ownership over the projects and the work they produce. The web pages of projects launched on the site are permanently archived and accessible to the public. After funding is completed, projects and uploaded media cannot be edited or removed from the site.^[30]

There is no guarantee that people who post projects on Kickstarter will deliver on their projects, use the money to implement their projects, or that the completed projects will meet backers' expectations. Kickstarter advises backers to use their own judgment on supporting a project. They also warn project leaders that they could be liable for legal damages from backers for failure to deliver on promises.^[31] Projects might also fail even after a successful fundraising campaign when creators underestimate the total costs required or technical difficulties to be overcome.^[32][33]

Asked what made Kickstarter different from other crowdfunding platforms, co-founder Perry Chen said: "I wonder if people really know what the definition of crowdfunding is. Or, if there’s even an agreed upon definition of what it is. We haven’t actively supported the use of the term because it can provoke more confusion. In our case, we focus on a middle ground between patronage and commerce. People are offering cool stuff and experiences in exchange for the support of their ideas. People are creating these mini-economies around their project ideas. So, you aren’t coming to the site to get something for nothing; you are trying to create value for the people who support you. We focus on creative projects—music, film, technology, art, design, food and publishing—and within the category of crowdfunding of the arts, we are probably ten times the size of all of the others combined."^[34]

Projects

On June 21, 2012, Kickstarter began publishing statistics on its projects.^[35] As of February 13, 2015, there were 207,135 launched projects (7,802 in progress), with a success rate of 40%. The total amount pledged was $1,523,718,656.^[36]

The business has grown quickly in its early years. In the year 2010, Kickstarter had 3,910 successful projects and $27,638,318 pledged. The corresponding figures for 2011 were 11,836 successfully funded projects and $99,344,381 pledged; and there were 18,109 successfully funded projects, $319,786,629 pledged in 2012.^[37][38]

February 9, 2012, saw a number of milestones set by Kickstarter. A dock made for the iPhone designed by Casey Hopkins became the first Kickstarter project to exceed one million dollars in pledges. A few hours later, a project by computer game developers Double Fine Productions to fund a new adventure game reached the same figure, having been launched less than 24 hours earlier, and finished with over $3 million pledged.^[39] This was also the first time Kickstarter raised over a million dollars in pledges in a single day.^[40] On August 30, 2014, the "Coolest Cooler", an icebox created by Ryan Grepper, became the most funded Kickstarter project in history, with US$13.28 million in funding, breaking the record previously held by the Pebble smart watch.^[41]

In July 2012, Wharton professor Ethan Mollick and Jeanne Pi conducted research into what contributes to a project’s success or failure on Kickstarter. Some key findings from the analysis were that increasing goal size is negatively associated with success, projects that are featured on the Kickstarter homepage have an 89% chance of being successful, compared to 30% without, and that for an average $10,000 project, a 30-day project has a 35% chance of success, while a 60-day project has a 29% chance of success, all other things being constant.^[42]

The ten largest Kickstarter projects by funds raised are listed below. Among successful projects, most raise between $1,000 and $9,999. These dollar amounts drop to less than half in the Design, Games, and Technology categories. However, the median amount raised for the latter two categories remains in the four-figure range. There is substantial variation in the success rate of projects falling under different categories. Over two thirds of completed dance projects have been successful. In contrast, fewer than 30% of completed fashion projects have reached their goal. Most failing projects fail to achieve 20% of their goals and this trend applies across all categories. Indeed, over 80% of projects that pass the 20% mark reach their goal.^[36]

Categories

Creators categorize their projects into one of 13 categories and 36 subcategories.^[43] They are: Art, Comics, Dance, Design, Fashion, Film and Video, Food, Games, Music, Photography, Publishing, Technology and Theater. Of these categories, Film & Video and Music are the largest categories and have raised the most amount of money. These categories, along with Games, account for over half the money raised.^[36] Video games and tabletop games alone account for more than $2 out of every $10 spent on Kickstarter.^[44]

Guidelines

To maintain its focus as a funding platform for creative projects, Kickstarter has outlined three guidelines for all project creators to follow: creators can fund projects only; projects must fit within one of the site's 13 creative categories; and creators must abide by the site's prohibited uses (including charity and awareness campaigns). Kickstarter has additional requirements for hardware and product design projects. These include^[45][46]

• Banning the use of photorealistic renderings and simulations demonstrating a product
• Banning projects for genetically modified organisms.^[47]
• Limiting awards to single items or a "sensible set" of items relevant to the project (e.g., multiple light bulbs for a house)
• Requiring a physical prototype
• Requiring a manufacturing plan

The guidelines are designed to reinforce Kickstarter’s position that people are backing projects, not placing orders for a product. To underscore the notion that Kickstarter is a place in which creators and audiences make things together, creators across all categories are asked to describe the risks and challenges a project faces in producing it. This educates the public about the project goals and encourages contributions to the community.^[48]

Notable projects and creators

At $8.5 million, the Ouya is the 6th largest successful Kickstarter campaign.

Several creative works have gone on to receive critical acclaim and accolades after being funded on Kickstarter. The documentary short "Sun Come Up" and documentary short "Incident in New Baghdad" were each nominated for an Academy Award;^[49][50] contemporary art projects "EyeWriter" and "Hip-Hop Word Count" were both chosen to exhibit in the Museum of Modern Art in 2011;^[51] filmmaker Matt Porterfield was selected to screen his film Putty Hill at the Whitney Biennial In 2012;^[52] author Rob Walker's Hypothetical Futures project exhibited at the 13th International Venice Architecture Biennale;^[53] musician Amanda Palmer's album "Theatre is Evil" debuted at No. 10 on the Billboard 200;^[54] designer Scott Wilson won a National Design Award from Smithsonian’s Cooper-Hewitt, National Design Museum following the success of his TikTok + LunaTik project;^[55] the Kickstarter funded GoldieBlox toy gained nationwide distribution in 2013;^[56] and approximately 10% of the films accepted into the Sundance, SXSW and Tribeca Film Festivals are projects funded on Kickstarter.^[57][58]

Numerous well-known creators have used Kickstarter to produce their work, including: musicians Amanda Palmer,^[59] Daniel Johnston,^[60] Stuart Murdoch^[61] and Tom Rush;^[62] filmmakers and actors Bret Easton Ellis,^[63] Colin Hanks,^[64] Ed Begley, Jr.,^[65] Gary Hustwit,^[66] Hal Hartley,^[67] Jennie Livingston,^[68] Mark Duplass,^[69] Matthew Modine,^[70] Paul Schrader,^[71] Ricki Lake,^[72] Whoopi Goldberg,^[73] Kristen Bell and Zana Briski; authors and writers Dan Harmon,^[74] Kevin Kelly,^[75] Neal Stephenson,^[76] Steve Altes,^[77] and Seth Godin;^[78] photographers Spencer Tunick,^[79] Shane Lavalette,^[80] and Gerd Ludwig;^[81] game developers Tim Schafer,^[82] Keiji Inafune, Brian Fargo,^[83] and Rand Miller;^[84] designer Stefan Sagmeister;^[85] animator John Kricfalusi; actor John de Lancie; comedian Eugene Mirman;^[86] animators Don Bluth and Gary Goldman;^[87] and custom guitar maker Moniker.^[88]

The Glowing Plant project was the first and only Kickstarter project to fund the development of a genetically modified organism (GMO).

Top projects by funds raised

Ten largest successfully completed Kickstarter projects by total funds pledged (only closed fundings are listed)^[89]

Rank	Total USD	Project name	Creator	Category	% funded	Backers	Closing date
1	20,338,986	Pebble Time – Awesome Smartwatch, No Compromises[90]	Pebble Technology	Product design	4,067	78,471	2015-03-27
2	13,285,226	COOLEST COOLER: 21st Century Cooler that's Actually Cooler[90]	Ryan Grepper	Product design	26,570	62,642	2014-08-30
3	10,266,845	Pebble: E-Paper Watch for iPhone and Android	Pebble Technology	Product design	10,266	68,929	2012-05-18
4	9,192,055	The World's Best TRAVEL JACKET with 15 Features || BAUBAX[91]	BAUBAX LLC	Product design	45,960	44,949	2015-09-03
5	8,782,571	Exploding Kittens[92]	Elan Lee	Playing cards	87,825	219,382	2015-02-20
6	8,596,474	OUYA: A New Kind of Video Game Console[93]	Ouya Inc.	Video games	904	63,416	2012-08-09
7	6,333,295	Shenmue 3	Yu Suzuki	Video games	313	69,320	2015-07-17
8	6,225,354	Pono Music – Where Your Soul Rediscovers Music	PonoMusic Team	Technology	778	18,219	2014-04-15
9	5,764,229	Bring Back MYSTERY SCIENCE THEATER 3000[94]	Joel Hodgson/Shout! Factory	Film & video	288	48,270	2015-12-11
10	5,702,153	The Veronica Mars Movie Project[95]	Rob Thomas[96]	Film & video	285	91,585	2013-04-12

Project cancellations

Both Kickstarter and project creators have canceled projects that appeared to have been fraudulent. Questions were raised about the projects in internet communities related to the fields of the projects. The concerns raised were: apparent copying of graphics from other sources; unrealistic performance or price claims; and failure of project sponsors to deliver on prior Kickstarter projects.

A small list of canceled projects includes:

• Eye3 camera drone helicopter for unrealistic performance promises, photos copied from other commercial products, and failure of creators to deliver on an earlier Kickstarter project.^[97]
• Mythic: The Story of Gods and Men adventure game for copying graphics from other games and unrealistic performance promises; the creator had raised $4,739 on an $80,000 goal before canceling the project.^[98]
• Tech-Sync Power System for failing to provide photos of the prototype and sudden departure of project creator.^[99]
• Tentacle Bento, a card game intended to satirize Japanese school girl tentacle rape comics, after being criticized in the online media for having inappropriate content.^[100]
• Kobe Red, a project for jerky made from Kobe beef, was canceled after raising $120,309. The project was allegedly fraudulent.^[101]
• iFind claimed to be a battery-free item locating tag. Critics of the project raised serious doubts about its viability, focussing on its claimed EM harvesting capability and the lack of a working prototype. Kickstarter suspended funding after $546,852 had been raised.^[102]

Controversies

• In May 2011, a New York University film student, Matias Shimada, raised $1,726 to make a film, but plagiarized another film instead. Later, he publicly apologized.^[103][104]
• In 2012, Amanda Palmer raised $1.2 million on Kickstarter. She wrote about how she used the money, however several other musicians reviewed these expenses and said they were extravagant and possibly fraudulent. She was further criticized for attempting to have musicians play with her for free on tour, after raising such a large sum.^[105]
• In April 2013, filmmaker Zach Braff used a Kickstarter campaign to fund his upcoming film Wish I Was Here and raised $2 million in three days, citing the success of Rob Thomas' Veronica Mars Kickstarter as his inspiration. Some have criticized Braff for using the site, saying celebrity use of the site will draw attention away from filmmakers and other creatives who don't have celebrity name recognition,^[106] a criticism that had been previously made in regard to big figures in the gaming industry using Kickstarter (such as Richard Garriott, who created a successful $1+ million Kickstarter despite his large personal fortune).^[107] Kickstarter has disputed these arguments by reporting that, according to their metrics, big name projects tend to attract new visitors to the site who in turn pledge to other lesser known projects.^[108][109]
• On November 6, 2013, writer/director Hal Hartley launched a Kickstarter campaign to produce his upcoming film Ned Rifle, seeking a total of $384,000.^[110] On November 25, Hartley added a $9,000 reward tier offering the film's distribution rights for seven years in the United States and other countries, making his Kickstarter campaign the first to propose offering film distribution rights.^[111] Subsequently, Kickstarter notified Hartley that selling distribution rights is a form of investment, which is forbidden by Kickstarter's terms and conditions, forcing Hartley to remove the option.^[112]
• In May 2014, Kickstarter blocked fundraising for a TV film about late-term abortionist Kermit Gosnell while allowing other similarly graphic campaigns to move forward. In June 2014 the project received approval for fundraising from rival site Indiegogo, representing the then most successful crowdfunding effort for Indiegogo, although it has since been surpassed.^[113]
• Since 2013, several crowdfunding campaigns have been accused of creating fake contributors in order to fool the public into thinking the campaigns were successful, and to defraud potential sources of matching funds.^[114]

Patent disputes

• On September 30, 2011, Kickstarter filed a declaratory judgment suit against ArtistShare in an attempt to invalidate U.S. crowd-funding^[115] patent US 7885887 , "Methods and apparatuses for financing and marketing a creative work". Kickstarter asked that the patent be invalidated, or, at the very least, that the court find that Kickstarter is not liable for infringement.^[116] In February 2012, ArtistShare and Fan Funded responded to Kickstarter's complaint by filing a motion to dismiss the lawsuit. They asserted that patent infringement litigation was never threatened, that "ArtistShare merely approached Kickstarter about licensing their platform, including patent rights", and that "rather than responding to ArtistShare's request for a counter-proposal, Kickstarter filed this lawsuit."^[117] The judge ruled that the case could go forward. ArtistShare then responded by filing a counterclaim alleging that Kickstarter was indeed infringing its patent.^[118] In June 2015, Kickstarter won its lawsuit with the judge declaring ArtistShare's patent invalid.^[119]
• On November 21, 2012, 3D Systems filed a patent infringement lawsuit against Formlabs and Kickstarter for infringing its 3D printer patent US 5,597,520 , ”Simultaneous multiple-layer curing in stereolithography.” Formlabs had raised $2.9 million in a Kickstarter campaign to fund its own competitive printer.^[120] The company said that Kickstarter caused "irreparable injury and damage" to its business by promoting the Form 1 printer, and taking a 5% cut of pledged funds.^[121] A six-month stay was granted by the judge for settlement talks in which Kickstarter did not participate.^[122]
• On January 23, 2015 a patent infringement lawsuit was filed by Alphacap Ventures LLC against multiple crowdfunding platforms, including Indiegogo, CircleUp, GoFundMe, Kickstarter, Gust, RocketHub & Innovational Funding, for three patents — US 7848976 , US 7908208  and US 8433630 . According to Bloomberg, Alphacap Ventures is a company that provides strategic, operations, and financial advisory services in the United States along with other financial services^[123]

See also

• Civic crowdfunding
• Comparison of crowd funding services
• List of video game crowdfunding projects
• Open-source hardware

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External links

• Official website