Written by Carl Franzen Appeared in TPM Idea Lab on February 24, 2012
NEW YORK — Kickstarter is having an amazing year, even by the standards of other white hot Web startup companies, and more is yet to come.
One of the company’s three co-founders, Yancey Strickler, said that Kickstarter is on track to distribute over $150 million dollars to its users’ projects in 2012, or more than entire fiscal year 2012 budget for the National Endowment of the Arts (NEA), which was $146 million.
“It is probable Kickstarter will distribute more money this year than the NEA,” said Stricker in an exclusive phone interview with TPM. “We view that number and our relationship to it in both a good and bad way.”
As Strickler explained, the milestone is “good” in the sense that it means that Kickstarter may now reach a point where it will funnel as much money to the arts as the federal agency primarily responsible for supporting them, effectively doubling the amount of art that can get funded in the country.
“But maybe it shouldn’t be that way,” Strickler said, “Maybe there’s a reason for the state to strongly support the arts.”
It’s worth pointing out that Kickstarter is quite different from the NEA. The 3-year-old website allows users to post their own random ideas for projects — everything from iPod Nano watches to children’s books on reproduction — and solicit donations from the rest of the Internet to turn them into reality.
Kickstarter does restrict the kinds of projects it will allow to be posted on its website to “projects with a creative purpose.”
As the site’s guidelines state: “Kickstarter can be used to fund projects from the creative fields of Art, Comics, Dance, Design, Fashion, Film, Food, Games, Music, Photography, Publishing, Technology, and Theater. We currently only support projects from these categories.”
Aspiring project creators are allowed to set their own funding goals and given a set window of time to raise the money, usually a month. Kickstarter takes a 5 percent cut of all successfully funded projects, which are used to pay the New York-based team of 37 people that run the crowdfunding website and other costs. The Kickstarter team offers advice to creators when asked, but other than that, its up to project creators to tap into their own communities to reach their fundraising goals.
“Successfully funded projects are the independent creations of these people,” Strickler said, “We provide help when asked. We know success rates for various product categories, we have a sense of what will make a project more or less likely to succeed. But we don’t get too granular with it, it’s not like, ‘oh if only Johnny had sent a message on this day his project would have been different.’ We’d love to have the time to do that some day.”
Successfully funding projects is easier said than done: 54 percent of all projects launched on the website fail to reach their funding goals, according to Strickler. In the event that happens, neither the project creators nor Kickstarter get any cash. Project creators aren’t penalized for failures, though either. But a cash deficit hasn’t been much of a problem for Kickstarter, especially not lately.
“Our entire lifetime funding is about $150 million,” said Strickler, “But $99 million was pledged last year alone.”
On Monday, the website saw the third project in its short history, a Web comic book, raise over $1 million. Before that, the first two projects to cross the million dollar mark — a computer adventure game from legendary programming guru Tim Schafer and a fetching American-made iPhone dock — did so just days prior, on February 10, and both within 24 hours of each other, no less. Kickstarter chronicled the amazing day on its blog.
“Thanks and congratulations to everyone on an unforgettable 24 hours. YES!!!!!” Strickler wrote at the time.
The Kickstarter team has eagerly tracked the progress of such projects and others, many of which quickly eclipsed their initial fundraising goals just days or hours after they launched (Kickstarter allows projects to raise as much money as they can within the time allotted). The team even threw a small impromptu countdown party reminiscent of a New Year’s Eve watch party at the company’s offices in Manhattan’s Lower East Side for when that adventure game — Double Fine Adventure — struck the million dollar milestone.
Still, Strickler was quick to emphasize to TPM that the company wasn’t overly concerned with specific dollar amounts.
“We had previously gotten asked a lot when and what the first million dollar project would be,” Stricker said, “We didn’t really care much. It’s an exciting milestone, but a project’s true value isn’t measured in dollars, but what it does in the real world.”
As for projects that have had a real world impact, Strickler pointed to the way that the website has already begun to change conceptions of how to fund movies: 31 films playing at this year’s South by Southwest Festival in Austin, Texas, were funded by Kickstarter donations, over 10 percent of those playing, along with 17 films at the Sundance Film Festival.
“There hasn’t been a tentpole blockbuster, yet,” Stricker noted, “But film is the largest category on the site. It’s raised over $50 million for projects so far.”
About Carl Frazen
Carl Franzen is TPM Idea Lab’s tech reporter. He used to work for The Daily, AOL and The Atlantic Wire (though not simultaneously, thankfully). He’s never met a button that didn’t need to be pressed. He can be reached at email@example.com.