Kickstarter

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For other uses, see Kickstart.
Kickstarter
Logo
Type of site
Crowd funding
Available inEnglish
Headquarters
New York City, New York State
,
United States
URLwww.kickstarter.com
CommercialYes

Kickstarter is an American-based private for-profit company founded in 2009 that provides tools to raise funds for creative projects via crowd funding through its website.[1]

Kickstarter has funded a diverse array of endeavors,[2] ranging from indie films, music, stage shows and comics to journalism, video games and food-related projects.[3] People cannot "invest" in Kickstarter projects to make money. They can only "back" projects in exchange for a tangible reward or one-of-a-kind experience, like a personal note of thanks, custom T-shirts, dinner with an author, or initial production run of a new product.[4]

History

Kickstarter launched on April 28, 2009 by Perry Chen, Yancey Strickler, and Charles Adler.[5] The New York Times called Kickstarter "the people's NEA"[6] and Time named it one of the "Best Inventions of 2010"[7] and "Best Websites of 2011".[8] 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.[9] The company is based in Manhattan's Lower East Side.[10]

Andy Baio served as the site's CTO until November 2010, when he joined Expert Labs.[11] Lance Ivy has been Lead Developer since the website launched.[12]

On February 14th, 2013 Kickstarter released an iOS app called Kickstarter for iPhone [13]. The app is aimed at users who create and back projects and is the first time Kickstarter has had an official mobile presence [14].

Model

One of a number of fundraising platforms dubbed "crowd funding,"[15] Kickstarter facilitates gathering monetary resources from the general public, a model which circumvents many traditional avenues of investment.[16] Project creators choose a deadline and a goal minimum of funds to raise. If the chosen goal is not gathered by the deadline, no funds are collected (this is known as a provision point mechanism).[17] Money pledged by donors is collected using Amazon Payments.[18] The platform is open to backers from anywhere in the world and to creators from the US or the UK.[19]

Kickstarter takes 5% of the funds raised.[20] Amazon charges an additional 3–5%.[21] Unlike many forums for fundraising or investment, Kickstarter claims no ownership over the projects and the work they produce. However, 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.[22]

There is no guarantee that people that 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. Contributors have no way of receiving confirmation unless they directly ask the original owners and Kickstarter itself has been accused of providing little quality control.[23][24][25] Kickstarter advises sponsors to use their own judgment on supporting a project. They also warn project leaders that they could be liable for legal damages from sponsors for failure to deliver on promises.[26] Projects can also fail even after a successful fund raise when creators underestimate the total costs required or technical difficulties to be overcome.[23][27]

Projects

On June 21, 2012, Kickstarter began publishing statistics on its projects.[28] As of October 10, 2012, there were 73,620 launched projects (3,426 in progress), with a success rate of 43.85%. The total number of dollars pledged was $381 million.[29]

The business has grown quickly in its early years. In the year 2010, Kickstarter had 3,910 successful projects, $27,638,318 pledged, and a project success rate of 43%. In 2011, the corresponding figures were 11,836, $99,344,381 and 46%.[30]

February 9, 2012 saw a number of landmarks set by Kickstarter. A dock made for the iPhone designed by Casey Hopkins became the first Kickstarter project to break a million dollars pledged. 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.[31] This was also the first time Kickstarter raised over a million dollars in pledges in a single day.[32] On May 18, 2012, The Pebble E-Paper Watch raised $10,266,845 to become the most funded project in Kickstarter history.[33]

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: Increasing goal size is negatively associated with success. Projects that are featured have a 89% chance of being successful, compared to 30% without. 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.[34]

The ten largest Kickstarter projects by funds raised are listed below. Among successful projects, most raise between $1,000 and $9,999. This proportion drops to less than half in the Design, Games, and Technology categories. However, the median money 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.[29]

Categories

Creators categorize their projects into one of 13 categories and 36 subcategories.[35] 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 two categories alone account for more than half of Kickstarter projects. These categories, along with Games, account for over half the money raised.[29]

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[36][37]

  • Banning the use of photorealistic renderings and simulations demonstrating a product
  • 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. [38]

Notable projects and creators

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;[39][40] contemporary art projects "EyeWriter" and "Hip-Hop Word Count" were both chosen to exhibit in the Museum of Modern Art in 2011;[41] filmmaker Matt Porterfield was selected to screen his film Putty Hill at the Whitney Biennial In 2012;[42] author Rob Walker's Hypothetical Futures project exhibited at the 13th International Venice Architecture Biennale;[43] musician Amanda Palmer's album "Theatre is Evil" debuted at No. 10 on the Billboard 200;[44] designer Scott Wilson won a National Design Award from Smithsonian’s Cooper-Hewitt, National Design Museum following the success of his TikTok + LunaTik project;[45] and approximately 10% of the films accepted into the Sundance, SXSW and Tribeca Film Festivals are projects funded on Kickstarter.[46][47]

Numerous well-known creators have used Kickstarter to produce their work, including: musicians Amanda Palmer,[48] Daniel Johnston,[49] Stuart Murdoch[50] and Tom Rush;[51] filmmakers and actors Bret Easton Ellis,[52] Colin Hanks,[53] Ed Begley, Jr.,[54] Gary Hustwit,[55] Hal Hartley,[56] Jennie Livingston,[57] Mark Duplass,[58] Matthew Modine,[59] Paul Schrader,[60] Ricki Lake,[61] Whoopi Goldberg[62] and Zana Briski; authors and writers Dan Harmon,[63] Kevin Kelly,[64] Neal Stephenson,[65] and Seth Godin;[66] photographers Spencer Tunick[67] and Gerd Ludwig;[68] game developers Tim Schafer[69] and Brian Fargo;[70] designer Stefan Sagmeister;[71] animator John Kricfalusi; Star Trek actor John de Lancie and comedian Eugene Mirman.[72]

Top projects by funds raised

Ten largest successfully completed Kickstarter projects by total funds pledged (only closed fundings are listed)
Rank Total USD Project name Creator Category % funded Backers Closing date Link
1 10,266,845 Pebble: E-Paper Watch for iPhone and Android Pebble Technology Design 10,266 68,928 2012-05-18 [1]
2 8,596,474 Ouya: A New Kind of Video Game Console Ouya Video Games 905 63,416 2012-08-09 [2]
3 3,986,929 Project Eternity Obsidian Entertainment Video Games 362 73,986 2012-10-16 [3]
4 3,429,235 Reaper Miniatures Bones: An Evolution Of Gaming Miniatures Reaper Miniatures Games 11,430 17,744 2012-08-25 [4]
5 3,336,371 Double Fine Adventure Double Fine and 2 Player Productions Video Games 834 87,142 2012-03-13 [5]
6 2,945,885 FORM 1: An affordable, professional 3D printer Formlabs Technology 2,945 2,068 2012-10-26 [6]
7 2,933,252 Wasteland 2 InXile Entertainment Video Games 325 61,290 2012-04-17 [7]
8 2,485,506 Homestuck Adventure Game MS Paint Adventures Video Games 355 24,346 2012-10-04 [8]
9 2,437,429 Oculus Rift: Step Into the Game Palmer Luckey Technology 974 9,522 2012-09-01 [9]
10 $2,405,511 (£1,578,316) Elite: Dangerous Frontier Developments Video Games 126 25,681 2013-01-04 [10]

Project cancellations

Both Kickstarter and project creators have cancelled 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 cancelled projects include:

  • 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.[73]
  • 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.[74]
  • Tech-Sync Power System for failing to provide photos of the prototype and sudden departure of project creator.[75]
  • 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.[76]

In addition, over 15 projects have been completely removed in lieu of public cancellation.[77] Kickstarter appears to reserve project removal for egregious claims of copyright or other severe breaches of policy.[78][79]

Geode iCache Scam and Other controversies

Kickstarter is currently not responding to claims brought up regarding the Geode iCache project, in which its creator, Jon Ramaci, raised over $350,000, then failed to follow through with the project. Kickstarter claims it is unable to help backers gain refunds, and has not replied to the several complaints made by a number of backers on the project page. [80] A number of backers of this project set up a Facebook group in an attempt to draw attention to the issue,[81] which has also been noted by online journalists.[82] This raises the potentially serious issue that anybody could start a project, gain funding for it, then disappear with the money. When interviewed about this potential problem on NPR, Kickstarter co-founder Yancey Strickler claimed that the question of refunds for failed projects had never had to be addressed.[83] Kickstarter board member Sunny Bates has tried to palliate these claims by suggesting that being 'scammed' for a small amount of money does not pose a serious problem.[84]

In May 2011, a New York University film student, Matias Shimada, raised $1,726 to make a film, but plagiarized another film instead. He later publicly apologized.[85][86]

Patent disputes

  • On September 30, 2011, Kickstarter filed a request for declaratory judgment against ArtistShare’s U.S. crowdfunding 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 of infringement.[87] 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."[88] The judge has ruled, however, that the case can go forward. ArtistShare has since responded by filing a counterclaim alleging that Kickstarter is indeed infringing its patent.[89]
  • 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.[90] 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 donations.[91]

See also

References

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  2. ^ Levy, Shawn (May 29, 2010). "Kickstarter raises money online for artistic endeavors, tapping into Portland ethos". The Oregonian.
  3. ^ Wortham, Jenna (August 24, 2009). "A Few Dollars at a Time, Patrons Support Artists on the Web". The New York Times.
  4. ^ Walker, Rob (August 5, 2011). "The Trivialities and Transcendence of Kickstarter". The New York Times Magazine.
  5. ^ Wauters, Robin (April 29, 2009). "Kickstarter Launches Another Social Fundraising Platform".
  6. ^ Walker, Rob (August 5, 2011). "The Trivialities and Transcendence of Kickstarter". The New York Times. Retrieved June 20, 2012.
  7. ^ Snyder, Steven James (November 11, 2010). "The 50 Best Inventions of 2010". TIME. Retrieved June 20, 2012.
  8. ^ McCracken, Harry (August 16, 2011). "The 50 Best Websites of 2011". TIME. Retrieved June 20, 2012.
  9. ^ Kafka, Peter. "Kickstarter Fesses Up: The Crowdsourced Funding Start-Up Has Funding, Too". All Things D. Dow Jones & Company Inc. Retrieved February 7, 2012.
  10. ^ Kickstarter - Team http://www.kickstarter.com/team
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  76. ^ Kirk Hamilton “Creator of ‘Satirical’ Tentacle-Rape Game Apologizes”, Kotaku, May 17, 2012
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  88. ^ Eriq Gardner (February 16, 2012). "Hollywood Docket: Comedy Club Documentary Lawsuit; Michael Jordan vs. 1st Amendment". The Hollywood Reporter. Retrieved March 23, 2012.
  89. ^ Jeffries, Adrianne (May 14, 2012). "Kickstarter Wins Small Victory in Patent Lawsuit With 2000-Era Crowdfunding Site". BetaBeat. The New York Observer. Retrieved May 17, 2012.
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  91. ^ “Kickstarter Sued: Formlabs 3D Printer Accused Of Patent Breach” Huffington Post, 21 November 2012

External links

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