CASE STUDY CREATION: KICKSTARTER 1

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1 CASE STUDY CREATION: KICKSTARTER 1 Case Study Creation: Kickstarter Teresa Lefko Sprague Buffalo State College April 5, 2015

2 CASE STUDY CREATION: KICKSTARTER 2 The Story For Kickstarter it is not about the business, it is about the story. At the heart of Kickstarter they wish to be authentic and passionate, which is strangely what also drives the most successful campaigns on their website (McCarthy, 2011, p. 45). Kickstarter carries on by way of providing a service that allows artists, musicians, activists, and would be civic leaders to raise money for their projects by soliciting donations from the masses. What is true for Kickstarter as a company, is the same truth for the projects promoted on their site, neither will succeed to get people on board through methods of traditional marketing (McCarthy, 2011, p. 44). What led to Kickstarter s success as a company, is what leads to the promoted projects successes everyday, an innovative way of using videos, photos, essays and more to persuade perfect strangers to hear your story, believe in your passion, and a want to become a part of it in a small way by backing it financially. Introduction and Background Since 2009 Kickstarter has existed as a platform for entrepreneurs to launch thousands of successful products a crowdfunding site that allows users to put ideas in front of consumers, get their feedback, and receive funding to get those ideas off the ground (Wunker, 2015). Kickstarter was created as a home for ideas of everything from films, games, and music to art, design, and technology, to gain the support they needed from people of all walks of life to make their ideas a reality. To understand Kickstarter is to understand the several guiding principles and ideas for which the founders have

3 CASE STUDY CREATION: KICKSTARTER 3 followed, both at the conception of the brand, and on through their years of successes. They are as follows: 1. Be a new platform and home for creative projects to gain the direct support of people in a financial manner that can bring their ideas to life (Seven Things to Know About Kickstarter, n.d.). 2. Each project must be independently created. Kickstarter will not get involved in the development of the projects themselves, it just provides resources and a platform for creators (Seven Things to Know About Kickstarter, n.d.). 3. Both creators and backers work together to get projects up and running. Kickstarter works on an all-or-nothing basis, in order to receive any money in support of the project pitched, the entire financial goal needs to be met, at which point backers are charged for the financial pledges, and Kickstarter will receive their fee (Seven Things to Know About Kickstarter, n.d.). 4. Backers support projects, but they are not signing up for any personal financial gains or actual investments. Creators maintain complete ownership of their product/project (Seven Things to Know About Kickstarter, n.d.). 5. Follow the historical ways in which inventions were funded for centuries. While large investors are great, soliciting smaller patrons is just as important, and for centuries these individuals have been referred to as subscribers (Seven Things to Know About Kickstarter, n.d.). 6. Supporting a project is more than just a financial obligation. Kickstarter believes it is also about supporting a dream to create something that an individual wants to see exist in the world (Seven Things to Know About Kickstarter, n.d.).

4 CASE STUDY CREATION: KICKSTARTER 4 Lastly, and probably most importantly is Kickstarter s simple mission, Help people bring creative projects to life (Seven Things to Know About Kickstarter, n.d.). Mission When reviewing what leads Kickstarter s innovative company culture, it comes down to the premise and mission (previously mentioned as helping people bring creative projects to life) for which they chose to open shop. For years Perry Chen cultivated the idea for his creative facilitation platform solo, and when he met Yancey Strickler in 2005, the ideation continued into development, and after finding the right investors and designer/programmer, Kickstarter launched in 2009 (McCarthy, 2011, p. 44). It is not everyday that you find a company whose sole purpose is to bring other people s dreams to life. In my opinion, it speaks to a humble and genuine character in which individuals can trust and treat a company more like a friend, and less like a corporation. This is a truly authentic way to build a business. While the concept of crowdfunding had been around for years, to build a sustainable company under these standards had not been, and are still not, commonplace. There is an interesting notion that exists within this paradigm: Kickstarter was Chen and Strickler s creative dream, and through the company s successes, by 2015, they had aided in more than 81,000 other creative projects being fully-funded and realized as well (Kickstarter Basics: Kickstarter 101, n.d.). It is an incredibly interesting and innovative concept to build a company on a profit model that comes not from a product, but by delivering an intangible service, for which you do not get paid unless it is successful as Kickstarter does not collect their 5% fee unless your project is fullyfunded (Kickstarter Basics: Kickstarter 101, n.d.). How amazing to think the company

5 CASE STUDY CREATION: KICKSTARTER 5 they created is based on their passions, and its purpose is for other people to realize their passions. The idea that their fee is not paid unless a project is fully-funded, leads to another innovative portion of Kickstarter s business model. Growth Co-founder Yancey Strickler became CEO in 2013, after a hounding from the masses that while Kickstarter had indeed kickstarted the crowd-funding movement, they had done so under arbitrary and capricious rules that embraced some projects while refusing to host others, which in turn limited Kickstarter s own growth (McCraken & Chafkin, 2015). Considering the threat that their business might be under attack, a massive change needed to be made to the business structure in order to allow the existing company to thrive. While Strickler was a founding partner of the company, he was also only a thirty-something, former journalist with no CEO experience, and thus did not exactly have the typical resume of an individual primed to take the reins of a startup company, especially one on the verge of transition and potential massive success if the right changes occurred (Inc., 2014b, 4:40). However, this innovative, and potentially risky, maneuver was exactly what turned Kickstarter around. Under the site s old model, Kickstarter was not considered a store, and at the time frowned upon hardware projects (McCraken & Chafkin, 2015). With Strickler firmly in control, any idea became fair game to use the site s platform, and the company quickly launched partnering deals with New York s Museum of Modern Art, itunes, and the video-game distribution company Steam to help further promote Kickstarter campaign creations (McCraken & Chafkin, 2015). At this point in 2015, after more than 5 years out in the world, and with a new CEO, Kickstarter is

6 CASE STUDY CREATION: KICKSTARTER 6 looking like not just a fundraising tool, but more and more like a publishing and distribution system for creators (McCraken & Chafkin, 2015). Furthermore, this looser approach that has strayed from the company s vision of only supporting certain projects, is no less valued or welcoming to the original small scale, artistic efforts for which it was created (McCraken & Chafkin, 2015). If anything, in my opinion, the thousands of proven successes from such a variety of projects, has only fueled the energy and enthusiasm for anyone with an idea in need of financial backing to launch a campaign on Kickstarter. Furthermore, this reengineering of the company has taken it from the point of turning away hardware projects to being considered by many as having been an integral part of the startup hardware boom (McCraken & Chafkin, 2015). How ironic that the point of contention under the previous vision (of shying away from this type of idea) is what has helped lead to the company s resurgence, and aided in its rebirth. The unusual choice of Strickler as the new CEO, proved a series of innovative ways to achieve success. As a co-founder Strickler was able to rely on the passions for which the company began, truly understanding his own values and adhering to those for guidance, rather than following traditional paths of business operation (Inc., 2014b, 1:15). He felt and has proven that a business can be sustained when it provides a real service to the public, and believes in a mission of benefiting the greater good (Inc., 2014c, 2:22). It seems so simple, but in a world of cut-backs and bottom lines, I think you would be hardpressed to name many companies that operate in this manner. As far as furthering his own and Kickstarter s future successes are concerned, Strickler feels that growth and maturation come from realizing and incorporating all the things you didn t know, not from a obtaining a certain profit (Inc., 2014b, 3:50).

7 CASE STUDY CREATION: KICKSTARTER 7 Goals Most companies have hard and fast goals of profits and size, certain hopes to take over the world so to speak, none of which are a part of Kickstarter s master plan. When Kickstarter looked for investors they were not looking for financial-minded individuals that hoped to be backing the next big Internet start-up, with hopes of their money turning into a massive return on their investment (Inc., 2014a, 1:05). Perry Chen and Yancey Strickler were honest with their intentions in these initial meetings with investors. They told them their story, they explained their passions, and they found likeminded individuals who simply wanted to start something that could help bring countless projects and ideas to life (Inc., 2014a, 1:05). Chen and Strickler offered something rarely seen today, a project that people would love, that they could explain through a story, and would resonate with many to breed enthusiasm (McCarthy, 2011, p. 46). From the beginning, and still true today, the goal was and is to be forever a sustainable, private company, which to date they have maintained for much of their company s history (Inc., 2014a, 1:15). Rather than striving to be big, Kickstarter has always wanted to just be great (Inc., 2014a, 1:29). This is not your average company striving to gain IPO status, their intention to be small and personable is an intriguing and untraditional one. To obtain and maintain these untraditional goals of remaining small, but still able to serve their community, requires a different sort of organizational chart. The make-up of Kickstarter s team is approximately half product development the engineers, programmers and developers for the site and platform and the other half is community based those that provide support, resources and integrity to the site s users (Inc., 2014a, 1:40). What surprises most people is that to this day there are still no business

8 CASE STUDY CREATION: KICKSTARTER 8 development types on Kickstarter s team (Inc., 2014a, 1:40). Most companies hope to grow big and strong, Kickstarter finds its challenge in remaining smallish and forever committed to their product, which is an obscure threat to a company s future, but fitting for a business like Kickstarter. Strickler feels that the driving force of their success will always be searching for solutions that bring the best possible outcomes for their community (Inc., 2014a, 2:55). While it is against the grain to hope to not get too big, this mentality has indeed always protected the organization. It has provided more than enough revenue, while continually allowing Kickstarter to invest in not only the product, but in the people who help customers realize their projects full potential (Inc., 2014a, 2:21). Opportunity Allowing customers to build their dreams is not a small goal, and in order to do so requires seeking and taking advantage of every opportunity. Strickler was groomed for his role in Kickstarter by realizing an earlier opportunity as a music journalist. He became interested in the process of how things are made, specifically how to monetize the content of music, which in turn becomes the process of how to produce an album (Inc., 2014c, 1:29). Strickler got involved in helping create digital-only records, so that he could help smaller house bands amplify the audience which their music could reach. It is easy to see how this experience relates to the larger idea of what would become Kickstarter, and how it is important to realizing the value of process to a final product. Kickstarter is considered a process-driven product the easier the product is to use, the larger the audience it can reach (Inc., 2014c, 2:30). This idea reminded me of the story of Tim Brown and IDEO s Design Thinking, and how this way of thinking is humancentered. Kickstarter follows this essence to some degree (University of Michigan, 2010,

9 CASE STUDY CREATION: KICKSTARTER 9 16:44). Design Thinking is balancing what is desirable, with what is technologically feasible, with what is economically viable (University of Michigan, 2010, 14:56). As Yancey Strickler said at the inception of Kickstarter, It was just that this idea made sense. And it made sense because we looked at our lives, and the lives of a bunch of our friends, and is was like, We would all try this (McCarthy, 2011, p. 46). The this was Chen and Strickler s idea of a process that would bring dreams and projects of all sorts to life. While the campaigns on Kickstarter do not typically address pressing global issues, I strongly believe the business model and platform created support this initiative, and it would most likely be among the founders greatest achievements to know their business furnished the deployment of such a vision. Kickstarter s product is a service, but this service has the goal of providing a place where humans may drive their ideas to the world. True to Design Thinking, Kickstarter has created a collaborative environment where people can get a better understanding of each other, place prototypes before a large audience and, when executed properly, can provide the motivation and tools needed for the creator to implement the idea (Brown, 2015). Kickstarter s community of financial backers share feedback and demonstrate support for ideas of products and projects large and small. While many campaigns on Kickstarter may be whimsical and unworthy of the true thought behind Design Thinking, Kickstarter itself follows the principles to some level, and creates a place where many others are capable of doing the same. Conclusion There are so many lessons that can be garnered from the ingenuity behind Kickstarter s success. As they had hoped for several years, Chen and Strickler were able to turn their story into a business that truly mattered to many people (McCarthy, 2011, p.

10 CASE STUDY CREATION: KICKSTARTER 10 46). They did not simply want to start something, they wanted to build a business that not only told their story, but encouraged everyone else to do the same. Kickstarter has indeed become the dream of its founders, and they have built it into a true success I suppose this will just be another story Chen and Strickler can tell for years to come. A story that proves putting the greater good of the masses ahead of all else can sustain revenue, and build a viable business model.

11 CASE STUDY CREATION: KICKSTARTER 11 References Brown, T. ( 2015, January 16). What we can learn from barn raisers. [Web log post]. Retrieved from Christmann, S. (2015, March 9). How to raise money on the web. The Buffalo News, p. C1. Inc. (Producer). (2014a). A platform for success: Behind the rise of global crowdfunding company Kickstarter Goals. [Video Podcast]. Retrieved from: Inc. (Producer). (2014b). A platform for success: Behind the rise of global crowdfunding company Kickstarter Grow. [Video Podcast]. Retrieved from: Inc. (Producer). (2014c). A platform for success: Behind the rise of global crowdfunding company Kickstarter Opportunity. [Video Podcast]. Retrieved from: Kickstarter basics: Kickstarter 101. (n.d.). kickstarter+basics?ref=footer McCarthy, C. (2011 September). Kickstarting innovation. Think quarterly: The people issue, pp Retrieved from kickstarting-innovation.html

12 CASE STUDY CREATION: KICKSTARTER 12 McCracken, H. & Chafkin, M. (2015). KickStarter: For fostering every form of creativity. Fast Company. Retrieved from most-innovative-companies-2015/kickstarter Seven things to know about kickstarter. (n.d.). Retrieved from University of Michigan. (2010, August 25). Tim Brown - From design to design thinking [Video file]. Retrieved from Wunker, S. (2015 January 14). Five innovation lessons from Kickstarter's most successful campaigns of Forbes. Retreived from sites/stephenwunker/2015/01/14/5-innovation-lessons-from-kickstarters-mostsuccessful-campaigns-of-2014/

INTRODUCTION. Overview.

INTRODUCTION. Overview. 2017 MEDIA KIT INTRODUCTION Overview In 2001, a group was started for Information Technology professionals who wanted to network the right way. 6500+ members, 200+ events and over 2000 people finding new