Kickstarter has changed the game for entrepreneurship in many ways. The crowdfunding startup, which lets users raise funding from the public and charges backers only if a project goal is reached, has helped create more than 8,800 new companies and non-profits since its inception in 2009.
Taking a 5 percent cut on successful raises, Kickstarted has funded nearly $3 billion for creators so far. "It's the people's lottery ticket for creative ideas," said co-founder and CEO Yancey Strickler at the Next Web conference in New York City's borough of Brooklyn this week.
But the company's rapid growth created many challenges. Over time, it became more difficult to weed out the not-so-serious creators from the legitimate ones. By 2012, a growing number of projects would fail to deliver results, thus leaving backers empty-handed. At the time, around 56 percent of projects failed, and only a quarter of successfully funded projects were delivered to backers on time, according to a Wharton study.
"Not all momentum is positive," Strickler cautioned. "We saw multiple million-dollar projects every week, [but] we had real concerns about what this was doing to the site."
In 2012, Strickler, along with co-founders Perry Chen and Charles Adler, decided to establish new rules: Creators would be required to list their major risks and business challenges, and make clear the "guts" of the creative process. The idea was to "ground the site not just in what was being made, but in how and who was making it," Strickler explained. Photo-realistic renderings of proposed projects were also banned. The goal was for Kickstarter to structure a platform on which only serious creators--those with a realistic vision--would be able to raise funds.
For the time being, the strategy appears to have worked. Only about one in 10 Kickstarter projects fail to deliver at present, and Strickler is bullish on the future of the company. Last year, Kickstarter reincorporated -- as a public benefits corporation -- which could help keep the board members and shareholders accountable to the public. Under this new plan, the company is required to aid the public in some way, and regularly report on its social impact and progress each year.
As part of ongoing effort to support artists, in 2016 the co-founders launched a stand-alone site called the Creative Independent, which has published essays by the likes of musicians Stevie Nicks, Bjork, and Philip Glass. Kickstarter has also launched in Mexico to encourage local entrepreneurs to build their businesses.
"We champion and celebrate the creation of art and culture," says Strickler, referring back to his company's handbook. He adds: "Fuck the monoculture."