At a Billion Dollars Pledged, Kickstarter CEO Yancey Strickler Reflects
At the beginning of this year, Kickstarter co-founder Yancey Strickler took the reins from his co-founder Perry Chen so the longtime CEO could focus on his own creative projects. Besides a big security breach last month, the major thing that has happened since then is that this week Kickstarter reached one billion total dollars pledged over the past five years. It’s a big number, and a good occasion to get the new CEO to talk about where the company is today and where it’s headed.
Unlike the reticent Chen, Strickler — who today personally backed his 976th Kickstarter project — talks a mile a minute. He tends to say something, and then rephrase it, and then place it in context, and then reflect on why it came to be that way, and then say it again. Which is to say: This interview has been edited for length.
Re/code: If you look at the billion users chart, it seems like it has a pretty regular growth curve. But looking back, were there any particular breakthroughs that stood out to you?
Yancey Strickler: There’s so many. I made the first-ever pledge on Kickstarter, I think for $20. The very first project we funded after we launched in 2009 was called Drawing for Dollars. We raised $35 from three people. I remember the first time a project raised $20,000, a band called Five Times August. The way a million dollars looks to people now is the way $20,000 looked then. When people who I don’t know intimately actually care about Kickstarter, it’s still kind of shocking to me. Because it doesn’t feel that different than it did that many years ago.
The billion dollar thing, obviously we’ve seen this coming for a while. I don’t know how to wrap my mind around a billion dollars. But what I like about it is — it’s the achievement of many people and not just a few people. It’s not like someone got rich off this happening, it’s that collectively a large swath of humanity decided this money should be distributed toward their peers to do things, to create things.
How is Kickstarter different with you as the CEO?
We’ve always been a team. I’m a really outgoing person, I was our first customer service person, I led the communications team. I was a journalist before Kickstarter. I like talking to people about what we do, so there’s been a lot more of that happening. I just think new energy can be a really positive thing and I’m full of it.
What are the interesting new products for the Kickstarter team today? What are you excited about building?
We’re a tool to bring creative projects to life. Money has been the core component, but we’re really excited to allow the system to better showcase people making things and what they’re making. We have to make it fun and intuitive to make projects, to find projects, and then we have to do a phenomenal job of serving people. There will be a number of iterative things and also a number of bolder ideas we’re excited to try out and see how they go.
From an outsider’s perspective, it seems like not a ton changes. There’s this core Kickstarter campaign page, and it has looked basically the same for a long time.
It’s very similar. Even if you go back to Perry’s first design in 2005, you look at it and recognize it as a Kickstarter project page. That was the original thought that came from a completely unsophisticated place, just the notion of what made sense. And since then everybody’s copied it, everybody. Every crowdfunding site looks exactly like Kickstarter, and I can tell you, none of them looked like that before us. Whatever this idea was that Perry had for how this thing should work, everyone else decided that’s right.
You have so much competition these days, and the notion of crowdfunding is becoming more and more familiar, and evolving to subscription crowdfunding and equity crowdfunding and online preordering. What is Kickstarter’s place in all that?
In terms of money raised, successfully funded projects, number of backers, number of international backers, Kickstarter is larger than every other platform and site combined. People are trying to build products built on specific verticals, and sell themselves as Kickstarter for books, Kickstarter for design, Kickstarter for restaurants. It’s not very hard to build one of these platforms, but actually building a user base and a reputation is really different. You could be promised to be on the homepage of one of these sites, but if nobody goes there, what’s the value?
Certainly more people will launch into the space, certainly when the equity stuff happens, you’re going to see Wall Street get into this heavily. But we feel really good about our focus on people creating things.
The main thing that is left out of that focus is charitable fundraising — personal medical expenses, things like that. Those are just not worlds we would like to get into. There’s high potential for fraud. Also, I don’t want to be an organization that makes money off of someone having a terminal illness. That’s heavy stuff to think about.
I was looking back at your blog posts, and it seems like time and time again an issue that comes up on Kickstarter is telling your users what you stand for — that Kickstarter is not charity, that Kickstarter is not a store, that Kickstarter can be for celebrities, too. Versus some other companies that try to be platforms that are open to whatever happens, Kickstarter is much more vision-driven.
I think that anyone trying to act like we are some closed organization is really exaggerating. Look at the world we support. Kickstarter has been an enormous game-changing thing, that has changed what gets created and how it gets created and who makes it. We are focused on 13 diverse categories that cover almost everything in the known universe.
I definitely think we’re asked to answer to a lot of things that other companies would not be, but we’re okay with that. We really work hard to be thoughtful, to operate with a high level of integrity every chance we get. Our instinct is always to talk about these things. We have a stats page that updates every two hours. I can’t think of another company that does that.
We feel very secure that our heart is in the right place — we’re driven by what we believe in, not by money. Any moment where we’re asked about the company’s position, we want to tell the truth, and be really open about it. That’s easier said than done but that’s always what we end up defaulting to, and I’m actually really proud of how we’ve behaved in those moments.
How concerned are you about the long-term risk of people thinking of Kickstarter as a place where you put money into things that often don’t come to fruition?
We are staunch defenders of our reputation. The first thing is: No money changes hands unless you meet the goal. It is an inherently safer system. What we’ve seen after 57,000 projects that we’ve successfully funded, we’ve had some projects run into trouble. If you talk about it and you’re straight about it, people will be fine, they’ll even help you.
Obviously we want every project to succeed, but not every one will, and that’s the nature of the creative process. You’re not buying something, you’re supporting the creation of it.
Long term, I want people to have the confidence that when they come to Kickstarter, they’re coming to a trusted platform, and it’s being run by people who really care. You also want people to look a little closer if something feels off. They should look at the comments and see what other people are saying. Really, where the system shines is when you’re raising money, you have the eye of the Internet upon you. If you try to fudge some facts, all it takes is one Reddit thread to uncover that.
You’re talking a lot about the Kickstarter community and the power of the platform. So in actual numbers, what percent of money now comes from returning backers?
It’s something like 25 to 30 percent.
Does that seem right to you? Do you want to move that number up?
It’s a tough question, I’ve often wondered that. You could argue that if it’s going up, it means less new people are pledging. I mean listen, this entire system is made up — I don’t know what the natural order is. Lifetime, 62 percent of the money has come from returning people, so that feels healthy. I think ideally you want new people coming in all the time, and then for them to come across something else that’s cool.
What percentage of projects do you reject?
The acceptance rate is close to 80 percent. The primary reasons for decline is charity or something open-ended. We talk to them first and we make suggestions. Everyone who launches a project on Kickstarter talks to someone here, a human being. We really care about this. A lot of them are people who did projects that we thought were great and they came on and joined us.
Is figuring out how much money Kickstarter has made just calculating five percent of a billion dollars?
(Laughs.) No — you would want to look at what we’ve successfully pledged, which is also on that page, and then whatever five percent of that is.
That’s a good amount of money (it’s $43 million). How do you spend it?
We’ve been in the black for three and a half years. We are just a mature, growing company that happens to be in a world of startups that are not profitable. We don’t make tons of money by any means, but we are able to provide great benefits to our team, we’re up to 79 people. We moved to a great space in Greenpoint (a former pencil factory that the company bought for $3.6 million). Our costs are salaries and insurance and Web services and things like that. But we’re a healthy, sustainable growing business, and it’s an amazing place to be.
Do you anticipate that Kickstarter will be Kickstarter for years and years to come?
Yeah, we’ve always been really clear that we have no intention of selling the company or trying to go public. We’re an independent organization that’s focused on things we believe in, which is helping people create. There can be a tendency as organizations grow that you soften or become more middle of the road, and that’s not us. As a company whose community and brand are built on the Web, I think we have to be a dynamic living organization, and that’s a constant challenge. Hitting a billion dollars is like — cool, great, now let’s get back to it.