-: Hello everybody, thank you.
(audience applauding)
So welcome to another conversation series.
It's my pleasure today to introduce Yancey Strickler,
one of the co-founders of Kickstarter
and I have a disclaimer and also boast,
which is I'm an investor in Kickstarter.
I haven't contributed to its success,
I just can boast that I thought it was a good idea
at the time.
But I don't think Kickstarter really needs an introduction,
so I'm gonna let Yancey come up and make some comments,
and make a short presentation.
We'll have a quick dialogue, and then we'll try to bring
you guys into the conversation early
because I know everybody has things to ask Yancey.
(audience applauding)
-: What's up everybody?
Thanks for coming today.
So may name is Yancey.
As Joi said, I'm one of the founders of Kickstarter.
There are three of us who started it.
There are now 56 people that work there.
We're in New York in the Lower East Side.
Our office is in an old tenement building.
It's like a weird three-story building.
Our front door is covered in graffiti and very confusing,
You should come see us sometime.
The end of April will be the four year birthday
of Kickstarter, it launched April 28th, 2009.
Although the origins of it were much earlier than that.
Hopefully, that's something we can get into here today
but in the past four years, this is what's happened so far:
over 550 million dollars has been pledged
to projects coming from people just like you,
people making art and movies and music and designs
and putting on plays and doing lots of creative things.
No one is famous, everyone is just someone trying to get
an idea out there in the world,
and you can see almost four million people
have come out to support them.
More than a million people have supported
more than one project.
So those are people who are really part of this community,
and we're sort of little Medicis or something like that.
And 38,000 projects have been successfully funded.
So all these stats right here
actually are publicly available.
We have a page our site Kickstarter/help/stats
which has a live data on pretty much everything we track.
So anytime we deploy a code,
which we do maybe five or six times a day.
We update this with all the live numbers
so you can see how much money has been pledged,
how much money is successful versus unsuccessful,
how much money products are raising,
and you can open up your calculator,
and you can figure out things
like the overall site success rate is 44%.
So 44% of projects successfully reach their goals
but even though the success rate is less than 50%.
About 90% of the money goes to successfully funded projects
which is interesting.
So Kickstarter has this all or nothing model
where you hit your goal,
and you get your cash or nothing at all happens.
And 90% of the money goes to successful projects.
There's this mass vetting that's happening,
where people really like something
or really don't like something.
You can also see the importance of that early momentum
in each project, so if a project has 20% of its funding goal
eventually succeeds 81% of the time,
which is just really counterintuitive.
You wonder where that tipping point is.
It ends up it's a lot earlier that you might expect.
This is me figuring out some things.
I'm sure you guys could figure out a lot more
by looking at that page,
and we have that there because we really think
of Kickstarter as being an experiment that is ongoing.
This is an idea that we came up with that we hoped,
prayed, thought would work, and it has
but we still treat it in very much the same way,
that we're trying to learn as much as we can about it.
I pulled this this morning just for Boston alone,
there's been over $20 million pledged
to projects here in Boston,
1000 have been successfully funded,
so that's a lot of money coming
in the creative community here.
And that's put on performances and done things
at the Media Lab and lots of different types of projects.
And actually just today,
and this is official unveiling of some kind or another,
MIT Media Lab has a page collecting projects coming
from students and alumnae, so there are a handful there.
Twine and Makey Makey were both huge, huge projects
and more of those will be appearing there.
This is a small feature that we have called Curated Pages
which we reserve for universities
and other cultural institutions.
The Sundance Institute has one, RISD has one, now MIT.
We're just collecting works that come from that community.
They're really fun to browse
and see some of the more creative things.
One of the things that we're most proud of
with Kickstarter is not this half a billion dollars
being raised or things like that,
is that, these things have been made
and been funded through Kickstarter have gone on
to actually appear in the real world,
and to be cultural artifacts, cultural works of their own.
So for example,
at the Sundance Film Festival last year,
10% of the films that were there
had raised money on Kickstarter.
There was a graphic novel
that was on the New York Times bestsellers list last year
that was funded on Kickstarter.
There's a film nominated for an Academy Award last year.
Stanford is teaching a class on how to use Kickstarter.
There's great project, the Air Quality Egg.
This is a really great design project from a couple guys,
really unique design to crowdsource
the tracking of air pollution around the world.
Cards Against Humanity which, maybe, some of you have played
is an amazing card game that was funded on Kickstarter.
Every time it's available on Amazon,
it's the number one bestselling product.
This is great, the Radiation Detecter,
Joi was a part of this one.
This came from a group of engineers and scientists,
and technologists who were basically looking to create
a cheaper opensource Geiger counter to distribute in Japan
after the nuclear disaster there.
And that was two different Kickstarter projects.
There's an a opera put on at the Kennedy Center.
We were declared the second largest publisher
of graphic novels, a lot of journalism projects
of people from New York Times, The Wall Street Journal,
whose editors are not interested
in covering certain stories, these journalists
are able to go out straight to the public
and do the things that they wanna do.
Amanda Palmer landed on the Billboard top 10
with an album she funded on Kickstarter.
And last year alone, 63 films that were funded
on Kickstarter went on to open in theaters.
It's been over 100 so far.
So these things, like this is a true measurement
of success, is the fact that these things
aren't just internet curiosities that we're all funding
because it looks cool on Facebook.
These are things that are going on
to really be important works.
Again, this year, at the Sundance film festival,
more than 10% of the films there were funded on Kickstarter.
At South by Southwest, more than 25% of the films there
were funded on Kickstarter.
In two weeks, there's a Tribeca Film Festival in New York
and it's gonna be more than 10% more there as well,
so real, real shit.
This is a really cool milestone.
This is a film called Inocente.
This is a short documentary film about a homeless girl,
who's also an artist and in February,
won an Academy Award for Best Documentary Short.
It was the first Kickstarter funded film to win an Oscar.
Six have been nominated before.
This is amazing, this was them a year ago
raising $50,000 from 300 people,
trying to make their thing, and there they are.
Really, pretty amazing.
Recently there's also been some other big things
that have happened.
Veronica Mars, maybe you've heard of,
this is a television show
that had been canceled a few years ago,
but the writer and the star Kristen Bell and Rob Thomas
had always wanted to continue it.
It's this quest that they had, so they managed
to put it up on Kickstarter
and it raised two million dollars in 10 hours.
It's now raised four and a half million dollars
and it's changing a lot of things, very suddenly.
So that the scale of what's happening, the types of things
that are happening here are getting bigger and more exciting
and we're certainly happy to see that happen.
But for us the thing that we continue to return to
is actually this project.
This project, Drawing for Dollars, this was the first
ever successful Kickstarter starter project.
This was successful four days after the site launched.
You can see three backers, $35, not a huge amount of money
and the project was you tell him something
that you wanted him to draw,
and he would draw it for you for $5.
That was it, that was the whole project
and its obviously very simple, very rudimentary
but there's something about it that I think communicates
the essence of what this is.
Here's an idea, heres how you can be a part of it
and we're gonna make this thing together
and Veronica Mars kinda starts here.
All these things kinda start here
and there's a real purity to it that we really love.
So that's just what I had to set the stage for us
and then we'll get into whatever you guys wanna talk about.
-: Thanks Yancey. -: Yeah.
-: So I'm gonna be watching the Twitter flow here,
but Stacey also, if you're here, watch it too
and then I'll ask a few questions
but if people have questions,
we're gonna be using just the one mic there.
So if you line up at the mic if you have any questions
we would be happy to take them.
One question is
you have, pretty, I don't know if they're strict,
but you have very specific types of things that you allow
on Kickstarter and things that you don't allow, right?
And I think it's also evolved over time a little bit,
but I think probably the spirit of it hasn't.
Can you describe a little bit why you started that way
and what those rules are?
-: Yeah, we were always interested, so the,
I don't know, the overall mission statement
that we use or phrase is creative projects
and creative projects can mean a lot of different things,
but we define it as a project,
meaning something with a beginning and end
and creative meaning it fits one of 13 categories
on the site, which are all kinda base on the arts.
It has evolved over time.
The first year the informal, unstated guidelines for getting
onto Kickstarter was just no bummers.
I was the only person who had to proof projects
but no bummers was the rule.
By that we meant anything that was using guilt
as a motivating force.
So trying not to make it about this child will die
if X or Y doesn't happen, we make it be about,
here's this great thing we're gonna make
and being very positive and very exciting, forward-looking.
So right now, the primary things we don't allow,
we don't allow any charitable fundraising
or cause-based fundraising or fund-my-life kind of things.
It's not that those things don't have value.
It's just that they have a hard time coexisting
in a site that's about art and creativity.
Joi you're raising money to save Haiti
and I'm raising money to publish my first book of poetry,
I look like an asshole, without even trying.
No one had to say anything.
That's just the kind of nature for art and creativity
but we deeply believe that that has value and that
there needs to be a space in the world committed to it.
So we have those rules and we do have an approval process
for projects going up that is far less stringent
than you probably imagine.
When someone builds a project, they submit it to us
and a member of our staff,
there's about seven different people
who will take turns looking at various projects,
just look at it, make sure it fits the basic rules
that we have and over 75% of projects are approved.
We like having that flow though,
so we have a sense of what's going on in the site
and really, the infrastructure and the health of the site
is really important and it's something
that we always have to monitor.
-: And Mike I'll get to you, I think in minute
so just a couple more things,
So I think it was last year
that the crowdfunding legislation,
for those of you who don't know.
I think a lot of it had to do with the success
of Kickstarter, but people say,
"Oh wow, maybe this is a way we should raise money
"for companies," which you can't do on Kickstarter.
So it's kind of ironic that this specifically fairly narrow
but precise way of fundraising for projects
was used to sort of spur,
I would call innovation or something in legislation
just to create a law that allows companies to fundraise,
crowd fundraise but that feels dangerous to me.
What are your thoughts?
-: It's called JOBS Act.
It's not something that participated in anyway.
No one even really talked to us about it,
but it allows something like Kickstarter
to be used to sell equity rather than selling a copy
of the book or something at the end.
To pass this law,
they had to change securities laws
that came in after the depression,
when the SEC was first created.
These were laws that had been on the book for 80 years
and so they are loosening those regulations
to allow us this to happen.
We've always been very vocal about the fact
that we would not pursue this.
What we really like about Kickstarter is that ideas
are not judged based on their ability to make money
or to be successful.
They're judged based on whether people like them
and think that they should exist
and looking at things through the prism
of will they make money, means that only 0.001%
of ideas even have a chance.
And on Kickstarter, most of the things that get funded
would be terrible investments,
but they are things that people wanna have happen anyway
and that's what beautiful about them and so that lower bar
and that fundamental question behind the justification
of something's existent is just that
do the people like this or not?
To us, that feels like a really healthy evolution.
So whenever this law goes into effect,
we will not change to fit it.
-: And then he last thing is more of a comment
but maybe just, I'm on two foundation boards,
Knight Foundation and MacArthur foundation.
We think a lot about funding and we also talk to people
like the National Endowment for the Arts.
It's a really interesting thing and we actually think
about the projects in the Media Lab as well.
If you can crowdfund it from people who wanna participate
in it, then what's the role of these traditional funders
and should we be collecting taxes and giving the money
to artists, what's the statistic
like your funding versus NEA?
You surpassed NEA, right? -: It was twice
as much last year--
-: So Kickstarter funded twice as much in arts
than the National Endowment of the Arts.
So there's something going on that's really interesting
and I think that we tend to focus so much
on the for-profit stuff, but that fundamentally changes
the world of philanthropies, the world of foundation
as well as the world of these kinds of research projects
that have research focus.
Anyway, I just wanted to flag that,
it's a pretty important conversation
that we're having and unlike the crowdfunding one,
this one actually, I think is one that you should probably,
if your not already, engaged in.
-: Sure, give us a call. -: We will.
And you're pretty good at answering here.
Thank you.
So Mike, do you wanna?
-: So maybe you set me up a little bit in that.
I'm wondering how something like Kickstarter
might actually affect research.
Like a PhD student, the work that we do, in some ways,
is kinda like a startup and you're taking risk
and you're not sure if it's gonna work out
and you're seeking funding;
either your PI is seeking funding,
you're seeking funding and you have to be able
to facilitate you doing that work.
And I'm wondering has anybody like,
"Hey I wanna do this research but I need the money?"
And have you guys thought of that?
Has anyone done that?
And then Joi, the question goes to you in that,
we've obviously had students who have been successful
through Kickstarter for companies and products,
but what about funding research?
And I think someone like Marvin Minsky
might back this too because there's this feeling
that research is getting narrowly focused
towards profitability and we're not taking wild ideas
and doing stuff that NSA or National Science Foundation,
might think is too risky.
So how this model might play
into the academic research environment also.
-: There are obvious places where this has happened
like a thesis film for someone in film school,
something like that is very practical application
of something like this.
But for something like pure research or something more
in the realm of science,
it's something we're really interested in.
There isn't a science category in this site,
but we did create this sort hacky category area just tags,
sort of attributes in various projects.
The first two tags we added were for civic and science.
And just thinking, there are a lot of projects,
things like the radiation detector
that have element of that,
that we think really fit well into Kickstarter,
but we're not sure how fully science fits
into what we're doing.
What we ask for every project is we ask people
to define what it is that they are setting out to do
and what an output will be,
and what it is that people get in return.
So I think that if you propose some specific thing
that you're gonna research at the end,
everyone will get to read your paper.
That would fly as far as we're concerned.
Most of the science stuff that we've had so far
has been more in the DIY, hacking science stuff,
a lot of people sending things into space.
I think there were a few dozen projects
of people sending stuff into space last year.
At least three of which sent TARDISs into space
so if you can get Dr. Who involved, you're definitely in.
But yeah, I think there's a lot
of great stuff that can happen there.
-: And I guess for me, we actually
had a relatively rigorous conversation
at the faculty meeting
about whether Kickstarter would be a good thing or not
because on the one hand, obviously we did it
so we think that it's a good thing
but the conversation was basically,
what if you are a bummer
or what if you're not that interesting
to the average Kickstarter user,
are we going to skew students towards creating projects
that are cool internet memes
and how does that affect research and rigor
and all these other things and it's a valid question.
I think that the answer is that it should be an end
that if we continue to be able to raise money
and fund students to do things,
and there are other sites to do things.
As long as it doesn't eclipse everything else.
There is a risk of it eclipsing other things
because we have projects like Makey Makey
that come out of the Lab,
who are successful in raising a ton of money,
and then the students say, "Oh wait a second,
"I could never get that amount of money
"doing something really serious and presenting it
"to my faculty advisor or one of the sponsor companies."
It is kind of a interesting thing
that we're gonna be watching as we go.
I often also get criticized
because there's so much diversity here at the Media Lab
and some of the kids are on Twitter.
I don't watch internet memes
but a lot of our faculty don't even have Twitter accounts.
I think what's really important for us is to really try
to increase the diversity.
Look at Kickstarter as one example
but instead of saying all right, that's bad.
We need to just start to figure out all the other things
and then that ties into a little bit of a question
for you is, do you see other things that are,
Kickstarter-like things, Indiegogo and others
but that are being inspired to take your model
but put it into spaces that are very, very different
from yours that you think might be successful?
-: I wanna start with the first part about...
There's an interesting way that the Blockbuster projects,
the Makey Makeys and whatever skew our idea
of what a typical Kickstarter is,
and also who can use Kickstarter.
The average project raises $5,000
and when my partner Perry, first told me about the idea
for Kickstarter in 2005 and it was all-or-nothing funding
and we're create arts in this way,
my initial reaction was well, this is American Idol.
This is gonna lead to a lot of bad art
and we have this sense that there just one way
that people read things.
There's one unified audience that's responding to things
but as we talked about it more, what you see is just
that the internet just has a million niches
and a million communities who care about various things.
So I don't think in the case of MIT,
I don't know that the person doing the super esoteric thing
would actually struggle because it could be that,
that super esoteric thing actually has a community,
and there might be some people that could raise $100,000
and someone could raise $10,000.
There's an inequality that happens there.
But there's a tendency that we have to look at the
very successful projects and then make a lot
of blanket assumption based on that,
like you can only do Kickstarter
if your very self-promotional.
You can't be shy or awkward in these Kickstarter.
None of those things are true.
In fact, I would argue that being shy and awkward
is kind of an asset because you feel a lot more human
and the discomfort you see in that video is kind of enduring
and you're like, "I'll totally give him $10
"because they went through and did this
"and this was hard for them."
But I don't know, I think all those qualities are important,
and are factors and I think that,
especially after only four years and really the past year
or two, are really starting to mature as an ecosystem.
We really know very, very little about
what really works and what doesn't.
We're still just guessing.
The best practices of Kickstarter today are different
than they were yesterday because of 20 things
that happened this morning that I have no idea about
and that will emerge slowly over the next couple of months
so that's a cool part of it.
In terms of other applications of the Kickstarter model,
there's been a lot of them.
There's a few hundred crowdfunding sites out there,
by our account, all of them look exactly like Kickstarter
and have same mechanics.
A lot of those focus on individual countries.
Kickstarter of Egypt, Kickstarter of China and that's cool.
We're only available in the US
and UK to start projects so far.
So that's a real need that's there.
This notion the model of Kickstarter, the dynamics of it
and all-or-nothing are new and were created by Perry,
but the idea of this goes back to Medici and patronage.
That's how art has always been made
and this past 80 years of art being subsidized
by corporations is like a weird bleep
on the long timeline of producing culture.
This isn't the newest idea.
It's actually a very old idea but just applied
in a new kind a way, and it's not an idea that we own.
It's an idea that can be applied
by a lot of different people
to make a lot of different things,
and the goal of this is for people to make stuff,
not for Kickstarter to make the most of.
Tons of other places where it'll work, I'm not really sure.
I think that we've been so focused on creativity
because that's just what we care about
and that's what exciting.
I think charity probably wouldn't work with this model
because they wouldn't go for all-or-nothing
because you couldn't possibly allow those $1,000
to not be collected.
I don't know, I don't know, we'll see if other models
have success with it.
-: Okay.
-: I have a, guess it's two related questions.
The first one is looking at projects on Kickstarter
and seeing
projects, particularly within categories
that look a lot like other projects in that category
or projects that have been successful.
I know I look at some of them and I sort of groan
and I imagine I'm only getting a little bit
of what you guys get.
I'm not sure how you deal with it
because I see a fair amount of it.
How do you feel about that when you get
so many duplicate projects?
And the second related question is
I'm a project designer so that's where my head is
but I think it's applies across categories.
You said you have a staff of 50 some.
Do you have people within Kickstarter that are
the film people, the photography people
that are responsible for looking at these things
and saying, "There's no way that guy
"is gonna pull this thing off; travel around the world
"in three days and do all these stuff?"
-: We look at everything.
We look at everything because it's our jobs
and because it's fun.
There is a part of us that sincerely believes
that every project is this special little snow flake
that might be modeled off of very closely
off another very special snow flake.
Really, the best way to build a project,
we always tell people, it's to look at other projects
and look at things that seems similar to yours
and take their five best ideas and make them yours
and do some other stuff with it.
The one thing is that people tend to focus
on the projects that make the most money,
which is not necessarily what we would choose to focus on
because our goals are people do things that are interesting
and do creative expressions of the platform.
A lot of projects their goals are
to try to have as big a project as possible,
which makes sense.
So I don't know, I think that there's just
a slow evolution that you see happen
from project to project.
Yeah, we have a team of 56.
We do have category people for few different categories.
What this means is that, there's a person who looks
at all the projects that come through for that category,
but we never ever get into like,
"Can this dude really do what he says he gonna do?"
Our belief is that backers are making those decisions
by whether or not they choose to support a project.
So 56% of projects are not successful.
So people have made up their mind
to saying something about that.
It's not our role to be arbiters of what's possible or not
and we probably do a really bad jobs with that
because we're not gonna be experts
in all the million different creative worlds
that are on Kickstarter.
In the case of product design,
we did set some base level rules last year
in a blog post that we did called Kickstarter's not a store.
You're laughing, it riled people up a little bit
and that was actually thinking about,
not about whether or not can people complete things
but I was thinking about the notion of truth
in advertising laws and those have been on the books
in the US since the 20s.
And basically, just this idea that the consumers
should be able to believe that the things they see are real.
And what we're seeing with Kickstarter projects,
particularly in the product realm
is just there were things that were in the early stage
of development that were being presented
as if they were finished,
as if it's just sitting on the shelf here in Iowa City
and it'll be on your door step in 48 hours
and not all projects are doing that.
We saw it sometimes and we certainly saw in backers
a mindset of like, "Hey, I pledged, where's my shit?"
And not understanding the fact
that you're creating something
that you're creating a process.
So we've made a few changes to our rules
to try to emphasize this and the chief ones were:
we banned the use of photorealistic renderings.
That came, I spent about a year talking
to product designers and people
at various big companies and schools
and a shocking number of them admitted to me
that they couldn't tell the difference
between a photograph and a 3D rendering
and I was like, "That's a problem."
That's a problem if that's where the technology's gotten
and that's how we're using to sell ideas.
So we wanted to just set an expectation,
just show the thing that you have, show your ugly prototype,
show all the weird wires and that the case looks terrible
but it's gonna get better, you promise.
That's a far better way to make something
because people then will be along with you on the ride.
We also banned the use of product simulations
so I couldn't argue that this thing
is powering this entire building
and try to set a few base level rules like that.
We asked everyone to talk about the risks
and challenges of making their thing.
And we felt like these were just like little speed bumps
to try to set a clear expectation of what was going on
in the site.
A lot of people got really mad about those rules.
Other people liked those rules.
It was a proud day for us because it felt
like we were making a difficult decision
and we were making it based on what we believed
would be right for the long-term health of this platform
and for it to sustain itself for everyone to use it.
So it's certainly something that,
I think probably cost us some projects
and cost us some money in the short term but long term,
we think it was the healthy and right thing to do.
-: Hi Yancey, my name is Erhardt Graeff.
I helped start The Awesome Foundation
here in Boston, back in 2009.
Colin, who's one of our trustees here in Boston.
And one of the things we think a lot about
and have over the past few years
is the idea of community and creating community
around a creative culture in the cities that we work in
and it's really easy to do that around the projects
that are successful.
Everybody sees them, they're high visibility,
we throw a party for the folks that we help get money for.
And we can find other ways to give them support
but we constantly struggle with what we do with the folks
that we don't give grants to;
how do we help them build community,
what's our responsibility to them
and how can we find other ways to support them.
So I'm curious about you guys at Kickstarter
who come at this from a different direction
with the crowdsourcing as well as the profit motive
that you have, do you feel that responsibility
and where do you think that you could create community
for both the folks that get funded and those that don't?
-: Well that that might be the best question
I've ever been asked in a Q&A ever so good job.
It's something that we think about.
The word you think of to describe a project
that did not raise its goal,
I think on the side it says unsuccessfully funded,
which is a mouthful but you think failed;
this project failed.
But it's such a damning term.
I know we're supposed to all think failure is good
but in our real lives we do not think that failure is good.
and it's such a damning term,
when reality you have taken this incredibly audacious step
of putting yourself out there and trying to do something.
And that is a huge victory, that is a huge victory.
When we were making Kickstarter,
we thought a lot about how, as you get older especially,
you're granted through gift of providence just ideas,
bursts of inspiration and too often you cast them aside
because you're just like, that's impractical.
I won't have the time, I'll never finish it,
blah, blah, blah, blah, blah, blah.
And these things just die, they're these little deaths
over and over, you toss these things aside.
And we'd like this idea of creating this place
where they're just like this very low bar
where people can put their ideas out in the world
and just see what happen.
And whatever came out of that was what would come.
So the fact of just posting something,
we see is like a huge step, it's a huge, huge thing.
It's a terrifying thing to do
and everyone who does that is awesome.
But some products don't make their goal.
11% of products don't get a single pledge.
So those people who didn't even tell mom
about what they did.
It's interesting, we don't send any special message
to someone whose project was unsuccessful.
We don't send it to someone who's successful either
but we are very interested
in trying to negate
the, I don't know, the black mark
that comes from not making it.
And I know why people feel it
because you have to be very public
to get your project funded
and it feels like some sort of rejection.
And it's a very public falling on your face
and that's not something that anyone ever likes
but long-term, I think it's important for us
that we make it clear that the real important step
is just putting an idea out there
and that whatever comes out of that is partially
in your control and partially not.
To jump to the community idea, just really quickly,
we have long debates about whether or not
there is such a thing as a Kickstarter community
or whether we even want such a thing to exist.
We very first and foremost, that every project
is its own distinct little universe.
And the backers of that project, those are their people.
They're not our people so we don't send anyone any emails
that they don't ask for.
We don't try to upsell anyone on anything.
We've never done any marketing surveys of anybody
and I don't think we ever will
because those are not our people.
Those are people that different project creators
have brought in to Kickstarter to make something
and that's amazing that they did that.
For us, it's always important to have that mindset of,
I don't know, Kickstarter is having a very small footprint
in the creative lives of people.
When people are excited to have us
be a bigger part of their story, that's cool
but we've never asked for, I don't know,
for our name in anyone's credits or anything like that.
We're just a stop along the way of each project
of hopefully coming to exist.
-: I'll just add on to that.
I don't remember the exact statistic
but at the Knight Foundation, we did a study
of proposals that we didn't fund for the small ones.
And it turned out that a lot of them ended up happening,
they wrote us letters saying,
"We actually got together to do this,
"to apply for this grant.
"You didn't give us money but we did it anyway,"
and then they ended up getting funded or other otherwise.
So I do think the idea of having a low bar,
so a lot like the Knight News Challenge
and the art challenge and stuff like that.
It kind of gives you the idea
and the Kickstarter page is a lot of work
but it's actually relatively easy to do.
And so it lowers the bar of people
wanting to get together to try something
because it gives you hope but once you're together,
you're kind of like, "Hey,
"maybe we should just do it anyway."
I do think that that happens even in the foundation space.
-: To add a comment to the community idea,
the thing that I find is kind of Tom Sawyer idea
of organizing.
The problem for me is not money.
The problem is finding partners who know different things
and probably more technical things than I know
about the project and it would be interesting
to me to have a team builder Kickstarter type of thing
but what I really wanna ask you about
is all of the interesting things
that happened because of Amanda Palmer.
I'm sure you've seen her TED talk which is about the ask,
which I think is very important in terms of the economics
and the way that she treats her community.
But she's also had problems
because of inviting local musicians up onto stage
and then not necessarily paying them,
beer, soft drinks, a chance to be on stage
so forth and so on.
So you have this confluence of money economics,
reputation economics and Tom Sawyer economics.
And I'm wondering if you have actual economists
looking at all of those confluences.
-: We have a team of thousands
at any given moment analyzing everything.
No, that was very well said, that was very well said.
I agree, all the dynamics that are happening
within a single project or what emanates from it
are amazing, there's lots and lots of different things.
There's like the core economics
of how much are your people pledging
and what are they interested I,
what's the price discrimination and things like that,
what are the networks that people are coming from,
what are they expecting out of it?
It's a unique combination of things and we've actually
been talking a lot about this a lot internally
and thinking about how when you think about
the primary means that money changes hands,
it tends to be because of commerce
because of a donation or because of an investment
and we see Kickstarter's having elements
that are similar to all those things
but really being its own distinct thing,
kind of a fourth way of transacting
that mixes those things,
where there is something changing hands,
there is a reward but you're largely backing things
out of affinity, which is like a donation model
but also there's like an emotional investment
but not an actual investment.
And there's also this participation
and part of this process that you're drawn into.
You can use that Kickstarter is not a store phrase
and look at in a similar way like it's not a store,
it's better than the store
because you get all this other stuff too.
There are so many dynamics that come in
to just a single project.
Yeah, we would love to have economists studying that.
I don't know a lot of economists personally
but I think there's probably a lot to draw from
and Amanda's great at challenging a lot of these things.
Her talk was great and the whole thing with the musicians
felt like a fundamental misunderstanding of who she is
but I thought she weathered that really well.
-: Thanks for coming here.
So my question is a little bit about the business side
of Kickstarter so it is clearly a two-sided market.
You need investors and you need creative people
for this Kickstarter model to work.
So in your very early stage, how did you tackle this?
It's kind of a chicken and egg problem;
unless you have investors, you don't get
the creative people attracted to your model
and the other way around.
So I would appreciate if you can tell
us some information about that.
-: It really starts with our epic launch plan, back in 2009,
where we'd been working on the site for a while,
we'd been talking about to our friends a lot
and then the site went live finally on April 28th, 2009
we emailed about 40 of our friends and said,
"Hey, that thing that we've been talking about forever
"is finally here; you should start something."
And that was all we ever did
and then people started launching projects
and their friends would back them and their friends
would start launching projects and it just grew
in that way and that's all that we've ever done.
It's very much moved within social circles
and creative circles.
So I remember the first year,
I was our sole customer service person.
If you started a project in that first year,
we talked a lot and I remember one day,
we had an Indian classical dance performance.
We'd never seen an Indian classical dance performance before
I thought that was notable and by the end of the week,
there were five of them.
I realized, oh, everyone just saw.
This is this one community, they all came to Kickstarter.
And that's the way this is emerged.
The big driver of backers are projects,
anytime a new project comes, it brings a lot of backers
to the site.
So something like the Veronica Mars project,
a lot of people have been wondering
does the success of a big property like this,
does this suck all this money away
from every other project on this site.
In actuality, it's gonna be the exact opposite.
It's gonna bring a huge new community,
a new audience people who come to Kickstarter
and they're gonna look around for other things to get into.
So a year ago, around this time,
we had a project launched called Double Fine Adventure
as a video game, as one of the first million-dollar projects
and it raised three million dollars
and we did an analysis about a month later
and we looked at people who came to Kickstarter
and back to Double Fine Adventure
for their very first project, the first thing they backed,
what else did they do?
We found that in the month after Double Fine,
they pledged something like another two million dollars
to other projects on the site in every single category.
So it wasn't like Double Fine just sucked all the money
out of the pie, it grew the pie considerably.
And this is how we've always seen the system work.
So something like a Veronica Mars, things like that,
it's gonna end up being a huge boon
to the entire community.
We as Kickstarter independently, we don't drive any traffic.
We don't really try to drive any traffic.
we have a newsletter once a week and that's about it.
We've always viewed that, you build a good product
and we are very fortunate to have creators
who are highly motivated to have their projects be funded
who are out there pounding the pavement,
telling people about what they're doing
and that ends up being the best possible endorsement ever
for a Kickstarter.
If you imagine your introduction,
is it's an old friend emailing and saying,
"We've loved each other for years,
"you know I've always been writing poetry.
"I'm finally gonna put it together and put it in a book
"and I'd love you to help me do it."
And that's an amazing thing.
And that's how this has grown so far.
-: Have you sent anyone?
I don't see where you sent it to me
so I'm gonna ask a question and then,
or you can come up and ask the question
while I ask you another one.
Are you thinking about going international or is that?
-: Sure.
-: (laughs) Okay, you don't want that one.
On the all-or-nothing,
I'm sure you've thought about it a lot
and then maybe you might not wanna talk about it
but what are the pros and the cons of it?
I wanna understand a little bit more
the psychology that you think goes around that
and how it affects your success.
-: So all-or-nothing is that you have to hit your goal
to get any money.
It creates a lot of excitement,
especially as it coming it comes down to the end,
the last three days, you're $10,000 short,
is it gonna happen, isn't it?
It's a sport, so that on its own is just entertaining.
I think it drives people to raise more money,
especially if they set their goal
in a slightly ambitious way,
which you don't normally encourage people to do
but there's a way when when you're within reach,
people will help you get there.
It also serves as a great way
to just test ideas without risk.
One of the real benefits is you're saying,
"All right, I need $50,000 to do this thing."
And if you only get $10,000, you can be like,
"Well, I guess people didn't really like this that much."
So I'll move on to something else.
So it's a very, very easy way to test concepts
and just see what people think is out there.
I think the only con of all-or-nothing
is just the fear that you're not gonna make it
and there are lots of other places that have models
that are not all-or-nothing,
you just get whatever you raise
but the challenge of that is if I'm looking
to raise $50,000 and I raise $1,000,
what am I obligated to do for that $1,000?
And where did that money go to
and it's just very unclear and it's very messy.
So the idea of this being like finite goal-oriented,
all those things, I think that can only happen
in conjunction with that all-or-nothing mechanism.
When we were building the site, we had projected
that 5% of projects would be successfully funded.
That's 44 percent and that number's
actually been very consistent.
If you take basically any, I don't know,
three or six months slice of projects,
you will find a success rate that's within
plus or minus two percentage points of 44%.
So there's something magical about that number.
Maybe 44% of ideas are good.
Maybe that's what we've discovered, I don't think so.
But it's just interesting to see how it's worked
and I know other sites, their success rates
are far, far lower but, I don't know.
There's no way we're gonna change that model.
-: The question is where is the curatorial influence
that is inherent in the Kickstarter featured selection
and the power of those selections?
-: There is not a lot of power in those selections.
There is an area in the site called staff picks
that's on the homepage, just one area in this home page.
The rest of the home page is all algorithmically driven.
It seems like a big prize but it isn't.
We just look at every project
and when we're excited about something,
anyone in the company can click recommend
and it just shows up in a staff picks area.
We just do that to highlight what we think
of as interesting uses of the platform
but every other website on the internet
is a far bigger driver of traffic and pledges than that is.
-: One of the things I most appreciate about crowdfunding
is democratizing access to populations
that usually have trouble and the stats I can find
are mostly in venture capital.
The comparison I would make there
but I see that less than 10% of projects go to minorities
in venture capital.
Less than 5% go to people under 25.
4% go to women.
And from what I've read, on Indiegogo,
40% of the projects are getting funded for women
and they're more successful than men.
I'm assuming or imputing
that you have some interesting stats about the demographics
of the successful campaigns and campaigners.
-: We've never done any demographic analysis.
So I unfortunately do not have fun data to share.
-: Next time. -: (chuckles) Sure.
-: Did you have demographics on the evolution of the funders?
-: No, we've never been interested in demographics.
I don't know, it's weird to think of slicing,
I don't know, the people who use Kickstarter in that way.
They're just people who came to support something
they're excited about.
We have a revenue model.
If a project is successfully funded,
we charge 5% of what they raise as our fee.
Based on that, we've been a sustainable business
for a few years now, which means
that we're not making decisions based
on pressures of monetization or maximization.
And that is not in any way what we believe,
not in any way what we believe in.
We're free to not think about those kinds of things.
We really relish in not thinking about those kinds of things
and instead, we just look at the things
that people are making and I don't know,
just building a good service for them.
-: Would you be willing, I just saw Ethan Watkins
has perfect timing.
Would you be willing to allow other people
to think about those things-- -: Sure!
-: Like maybe you could make a way for somebody
to do a study on the diversity.
-: Sure.
-: Maybe that's something. (mumbles)
We're talking about the demographics in the diversity
of the funders and the project.
So I do think that's actually quite interesting,
from the perspective of,
I'm not gonna promise on behalf of the Knight Foundation
but I can imagine foundations being very interested
to see where the money comes from
and where it's going, into what kind of projects
because not only is it interesting
from the foundation perspective because we look at that
but also to understand how we can participate and nudge
because that really is an important thing and also,
from the perspective of the Media Lab,
diversity is actually really important.
I'm criticized continuously by the fact
that my conversation series is not very diverse
and I'm working on that but also just generally,
the Media Lab students and faculty,
it's very difficult and it's a struggle.
And I'd be very curious to see how it's trending.
But also to your point, that I found really interesting
where the new projects bring their communities with them.
Maybe there's a way to systematically,
increase different communities by going out
and doing outreach and that's also was behind
my question about international.
If we can get a certain new category of projects
and you might bring interesting diversity
because our work, in Detroit for instance,
a lot of times it's just a no-no.
But they have the internet now.
So that would be kind of an interesting thing is to,
do outreach.
-: Are there any other questions?
-: I have a little bit of time here with you.
-: What?
Who has a question that they would like to ask.
Can we not do the microphone thing?
The microphone thing seems intimidating.
-: Yeah.
-: I'll repeat the questions.
-: So my question is about, given the successful
(student speaking faintly) that this was answering
the question of can a sole niche of fans,
a television show justify investing in something like that.
(student speaking faintly)
So I wonder, especially within the television industry,
how big can Kickstarter get?
Do you think to change (student speaking faintly)
the television industry or do you want to?
-: So the question is: In the wake of Veronica Mars,
how much impact does Kickstarter think it can have
in the television industry
and how much impact do we want to have?
I don't care.
I think that Veronica Mars was
amazing because it was ultimately about the fans, right?
Rob Thomas and Kristen Bell,
they didn't ask anyone for money,
they just created the opportunity for people
to help them make a new thing.
Like that was entirely about the fanbase.
People were thrilled.
People were like crying, saying, "I just gave you $100,"
and they're like crying over that, it's bizarre.
But it's also really, really amazing
and really exciting and I think,
a really interesting evolution.
There's been a lot of people, debated what does that mean,
does this ruin everything, all that sort of stuff.
And the beauty of, whatever results from Veronica Mars
is that because of the all-or-nothing nature of Kickstarter,
because of this massive vetting of projects
that happens when anything gets posted
is that whatever happens in the wake of this
will be under the control of all of us.
We will decide whether X person using this
is bullshit or not.
We will decide the right and wrong ways
for this to happen based on whether or not
we choose to fund them.
So whatever emerges as the new rules from this
will be completely determined by everybody.
And that's a significant power
that we haven't had before and so I don't know.
The way I view whatever happens the wake of this
is just that it's gonna be honest.
And it's gonna be what people really feel
and we'll all get to see it happen
and we'll all learn exactly as it goes
and I don't have any special window
into what will result.
One thing I will say about television specifically
is that in 2005 or 2006, came over when Perry
and I were were working on Kickstarter very early days.
It was when Arrested Development got canceled,
if anyone remembers Arrested Development,
we were fans of the show and thought,
well this would be a great thing
that Kickstarter could be used for.
And so Perry went to college with David Cross
who plays Tobias Funke on the show.
Perry went to college with David Cross' cousin
and through that super tight hookup,
got a meeting with David and pitched him
on trying to save Arrested Development
using this Kickstarter idea and David was like you guys,
don't understand anything which is still true
but he liked the idea and through that,
became Kickstarter's first investor.
And that really kind of got us rolling
to get David involved but there is a history there,
there's a history there.
I think like a bigger project like Veronica Mars happening
is just interesting.
I think we're all gonna learn a lot
and none of us really know which way it's gonna go
but I'm interested to see what happens.
See everyone now has a question,
it's all about the microphone, yes.
-: So my question is about how you see the future
of crowdfunding affecting philanthropy in general,
a little bit related to what we were talking
about with the National Endowment of the Arts,
related to the arts.
When you give to say, New York City Ballet or something,
it's considered a donation and I think,
would be considered charity, whereas if you gave to
(student drowned out by sniffling)
Kickstarter it's considered creating something cool.
So I'm wondering if you feel like philanthropy
is gonna change in the future based on--
-: So it's a question, is what is impact
on the future of philanthropy of Kickstarter
and crowdfunding.
It's a good question because the model
for traditional philanthropy,
whether it's the a Ford Foundation or whoever
is that they're taking large grants of money
and that they're deciding how to disperse them
to various projects and lots of higher art especially
has been sustained through this model.
And it's an incredibly important model
to keep that going.
We talk to a lot of those people, people of Ford
and the big foundations
and they're certainly interested in Kickstarter
but what they respond to or what their questions are,
we're so specifically project focused
and focused on programming whereas they're focused more
on the broadness of allow us
to support X, Y and Z sorts of things.
There's an interesting dynamic that happens there.
There was kind of an alarmist
but really interesting article.
I think was in the East Bay Express a week or two ago
about this move towards
almost shopping as philanthropy.
And this very finite thing of you support
a Kickstarter project and that's how you support dance,
you support your friends thing.
So the move towards more tangible,
finite project-based funding,
I think is something that will probably happen.
How that impacts the larger foundations, I don't know.
I don't know if they'll move to do that
or if they'll continue on the same way.
I think that the two are very symbiotic
and can be very supportive of each other.
Joi mentioned the NEA before and many of the artists
who got NEA grants or through the,
there aren't direct NEA Grants anymore
but people who also use Kickstarter.
These things are often one and the same.
We have absolutely zero desire, negative desire
to replace any of these things or to show
that these things are ineffectual in some way
or anything like that.
This is just a new pool of money
that's being made available to people
who probably weren't applying to grants anyway
or maybe weren't getting that grant.
So it's a good question.
-: We actually, at the Knight Foundation,
have a person whose job it is to help
our grantees use Kickstarter-- -: A job creator.
-: It really is a leveraging of
because it helps them become more sustainable,
diversify their income.
So I think we find it as additive income, at least.
Or you can pick.
-: Yeah, you.
-: Can you say a little more about the process
of starting the site before it launched?
-: Yeah, so he asked about the process
of starting the site before it launched.
Perry Chen, who's our CEO and my co-founder,
he first had the idea in 2002.
He was living in New Orleans and wanted
to throw a concert and didn't have the money to do it.
So the concert didn't happen but he thought
if only he could have asked people ahead of time,
he could have known whether or not,
people actually wanted it to happen.
And he thought he could have people put up
their credit cards and they would only be charged
if everyone agreed and that was the core
or the idea and so this sat with him
and he called it The Idea.
That's what it was known to as his friends.
He would just like turn this over in his head.
He's living in New Orleans working as a recording engineer
and waiting tables and hanging out.
He moved back to New York in 2005 where he and I met
at a restaurant in Brooklyn, where I was a regular
and he was waiting tables at the time
and we became friends and started talking about this idea.
And we brought in, we found,
through a mutual friend, a designer,
third founder, Charles Adler,
the three of us started working on it
but our backgrounds were: Perry's an artist,
I was a rock critic and Charles was a graphic designer.
So that is not a strong foundation
to start a technology company, it turns out.
So we flailed around for about three or four years.
Charles and Perry were full-time on it.
I still had a day job.
We tried working with outside developers,
it was a disaster.
We lost a lot of money, made a lot of mistakes
and eventually managed to meet some good people
who helped us meet other good people
and we had people who could help us vet engineers
versus us being like,
"Well, he seems like a good dude, why not?"
And finally, in mid-2008,
we managed to get the right team together
to start building the site and site managed
to get built in about five months.
But there are a lot of interesting steps along the way,
in 2005, we post this on a blog a year ago,
if you search for happy third birthday Kickstarter,
it will show up.
The entire design history of Kickstarter.
So in 2005, Perry, using Photoshop,
cut and pasted parts of MySpace and YouTube and other sites
to design the Kickstarter project page
and you look at that page now and you're like,
yeah, that's Kickstarter like unmistakably,
it's Kickstarter and that was in 2005.
And we show every iteration since then.
We were Kickstartr with no E at the end like Flickr
for a long time.
We didn't manage to buy the E until
about a month before we launched.
It was this long process and it was this thing
that seemed impossible but really,
especially to Perry and Charles's credit,
they just continued fighting for this thing
and the day it launched, it was just relief
that it was there.
I remember, it launched at 4:34 on a Tuesday afternoon
so you can tell like how strategic that was.
It was like, "Alright, is everything ready,
"is everything ready?"
All right, go and everything since then
has just been just a wonderful experience of seeing it grow.
But it's very accidental in a lot of ways.
Yes sir.
-: Yeah, they gave me a microphone
so I couldn't escape it. -: How about that?
-: With the rise of venture capital,
there have been the rise of serial entrepreneurs
who can just kind of flip it every five years,
they're doing something new and they're going back
to the same source for funding.
Do you see this happening with Kickstarter
and other crowdfunding sites,
where you're gonna get crowdfunding mavericks
who can just do this over and over
and is that gonna push other people to the sidelines?
Do you limit people's participation at all?
-: No, we we ask that people only have one active project
at a given time and that's still kind of soft rule,
there are exceptions that would make for that.
Yeah, there are definitely people coming back
and doing it repeatedly.
I forget the exact numbers but it's pretty substantial.
Our two most prolific creators
have each done over 30 projects.
One is an author and another guy as a city planner
in Detroit, who just keeps remaking spaces
and weird stuff.
I think that there will certainly,
mature creators will emerge from this
who will be seen as, I don't know,
yeah, as Mavericks, I guess is a good word for it.
Someone like Scott Wilson who created
the first TikTok Lunatic watch which has happened in 2010,
that was almost raised a million dollars.
He's done about four or five projects now.
He's like the Kickstarter guy.
I don't really see a danger in that.
Some people are gonna find this to be the best possible way
to get their ideas out there.
Who else has an idea or has a question?
Yes sir.
-: (speaking faintly) founders, especially
as their project start to get a little bit of stage,
start to tinker around with other ideas or other projects,
is anything else that you're working on?
Just been talking about sharing your spaces
that you're actively interested in.
-: There's a few songs I'd like to play, if that's all right.
No, nothing professionally.
There are other things that I do with my time creatively
but not for any specific goal.
That was a disappointing answer. (laughing)
Yes sir.
-: As a former rock critic,
you might be more interested in talking
about what Kickstarter has done
vis-a-vis the music industry,
so I'm wondering if you have any ideas about that
because I think that's the most disruptive
or disrupted of the commercial arts right now
and I think Kickstarter has had a real impact on that.
-: Yeah, it has.
There have been over 10,000 successfully funded
music projects so far.
Every genre has seen millions and millions of dollars,
which has been exciting.
I don't have a lot of thoughts about the music industry,
to be honest with you. (chuckles)
It's just kind of its thing.
What I do think is interesting,
I like that you said a commercial art form.
I think a lot about film and music
from that vantage point of a commercial form.
They're kind of unique in that way.
Film is 90 minutes because
that's what the marketplace requires.
Because if you raise money to make a film,
the hope is that a plays in theaters
and people buy tickets and to play theaters,
it has to be a certain length and have to have three arcs
and blah, blah, blah.
There's nothing that says an album should be 12 songs,
it just is because that's what fit on the commercial form
that was available.
These are formats that people are inserting
themselves into and expressing themselves through
but there's nothing inherent in their art
that necessarily says that
but it's a useful limitation, for sure.
But when you play this out when you play out the idea
that your funding sources do not have commercial interests
or market interests, your funding sources
are just simply people who like you and just say,
"Go do your thing and make it awesome."
The notion of what a movie is, the notion
of what a record is are things that become very malleable.
And I think that's something that you'll start to see.
If you don't care if your thing plays in the theater,
you're gonna make a lot of different choices.
And so that's something that we think a lot about
and hope to see a lot of crazy weird shit happen.
-: Hi. -: Yes.
-: I'm Deborah and from Brazil
and there are so many people collaborating
with so many projects.
Kickstarter, are you collaborating in any project also,
when you think it's really good and they are not achieving,
are you doing that?
-: Do we get involved?
Not really, maybe personally,
if I feel personally inspired by something,
I'll reach out and be like,
"Hey, here's something you should think about."
That used to happen more often than it does now
but we certainly are, I've backed 800 projects
so I'm in the site all the time.
I love being involved in stuff but,
we're in this really privileged position
of getting to be a part of people's ideas
at a very early stage
and we just view that as something
that we have to take very seriously
and we have to honor as much as we can.
So we really believe in people,
being able to have their vision expressed the way they want,
be it something crazy like they're trying
to charge $1,000 for a download of a song.
We might be like, "Maybe that's not the best idea,"
but in general, we like to let people guide themselves,
I would say.
-: Have you had kids-- -: Not yet.
What's that? -: No! (laughs)
Sorry, have you had kids successfully fund projects
so far? -: Yeah, we have.
You have to launch a project with a parent or a teacher,
if you're under 18 but yeah, there been some great ones.
A good one this past year, there's a group
of sixth grade girls from Kentucky
who launched a camera into space
and documented the whole thing, it was awesome.
That was that was really fun but yeah, yeah, for sure.
Anybody else?
-: As you go on, where do you see Kickstarter going?
What is the future of Kickstarter?
And I think one of the things in crowdfunding
is the seed is where you want your friends
to fund something or the closeness.
As you grow, is there any aspect
that may be lost in that
and where do you see it going?
-: Yeah, our hopes for growth are:
in five years, we would like for Kickstarter
to look pretty much exactly the same as it does now.
Hopefully, we have some cool ideas for other ways
to do things but we don't have any real desire
to change things that dramatically.
Instead, our hope would be that in five years,
the rest of the world looks more like Kickstarter,
in the sense that movies that are playing in theaters
are being made and funded by normal people
and you go in a comic book store
and all the graphic novels were made by your peers
and just these things are sprinkled around us.
So we saw last year, in some of those slides
I showed at the beginning,
that's what I think of as the start of that.
It's also awesome and people don't even know these things
are made in this unique novel way
but they don't need that, they could stand on their own
and so that's exciting to us.
I guess we expect it to continue to get bigger,
still, it seems like a very small number
of people know what Kickstarter is and that's gonna increase
and that's cool if it works out that way.
If this is as big as its ever supposed to be,
that's alright too.
I think that even as the site has gotten bigger,
each project is still its own little universe
and is its own thing and I don't think
that's gonna change that much
and I don't think having like a Veronica Mars on this site
is gonna make it so everyone has to be famous to use it.
I think those people are coming to play in our pool
and that they're using our tools
that we built for ourselves.
I think the essence of this can sustain itself
and can be the same.
That's certainly what we're betting on
and we hope to be true.
We feel like this exists so that people can make things,
that people can make things, that's it.
We feel a moral obligation to that girl in Vermont
who wants to do a $500 lithograph project
just because she thinks it's cool.
That's why this is here and so we always
wanna be a place for those people and make it clear
that no matter how big or small your idea is,
it's a great place to make it.
-: How much do you think this model is going
to be adopted by mainstream retail.
So you can imagine you know on Amazon,
looking at a wide variety of outfits or something
all of which are virtual until they get sufficient orders
to be implemented.
-: That's some advanced stage capitalism right there.
I don't know, I don't know.
I don't think anyone's really done it yet.
Someone says they have, I'm not aware of that.
I can't imagine all the ways
that this idea is gonna be applied and evolved.
I think one of the breakthroughs that's happened with this
is actually something a little different than that
which is just that when we think
about how artists make money and how they get funded,
it's always been open question about how that would happen,
we've had corporates subsidized over the period
of the last 80 years or so, with the internet,
it's clear that period is changing significantly
and there's been this kind of utopian idea
that if only we could all just pay artists
because we all like art and we can all sort it out ourselves
and that's been this this ideal that I think we've been
reaching for and Kickstarter's made that so that's true.
It made it so that's socially acceptable in a scalable way
and that's actually a big hurdle to clear that does things,
that creates a lot of things beyond Kickstarter.
If it just becomes okay to pay people directly,
to pay artists directly and that becomes normalized,
there's just a lot of things that get opened up
and that's something that I'm excited to see.
We really kind of view the crowdfunding mechanism
as being kind of boring.
It is a mechanic, no one has backed a project on Kickstarter
because they wanna crowdfund something.
They do it because they're like, "This is cool.
"Totally, I'm in."
We actually never used the word crowdfunding
for that reason.
It kind of misses what the point of this is.
I don't know, I don't know.
Those are the ways that we think about
or that I think about what this creates after the fact.
Over here, there's a man with his hand up.
-: Yeah, this is Andy from E Ink
I just have a question.
It's been like exciting for us as a company
to watch products that use our technology be successful
and it's caused the higher beings to ask,
as a component company,
is there a play for us on Kickstarter?
And it's interesting because historically,
market research was always the best way to prove or disprove
whether a concept had market opportunity potential.
All of a sudden, we start getting people to basically,
back or pre-buy products that might not ship for 12 months,
it's even more powerful.
When you look at the landscape,
we don't make end products yet
but do you see an opportunity for big brands
that don't need venture capital or are afraid
to give up equity, but it's just an innovative way
of pre-selling products?
Is there an opportunity for big brands to use Kickstarter?
-: No.
No.
We've heard from those companies, we've always said no.
We don't have a formal guideline around that
and something like Veronica Mars brings up
an interesting use case
because it's a Warner Brothers property and things like that
but no, could Sony launch PlayStation 4 on Kickstarter?
No, I would that was wrong.
-: Is it wrong because it's not Indie
because one of the things that big brands provide
is a track record of delivering product on time
and when you look at even when the Pebble shipped,
the first week they had software slips?
-: You're right that if you're treating as a storefront,
it would be more dependable if you're going,
dipping into Nike's global supply chain
to make something but that's not the ultimate goal of this.
I think that it doesn't fit because what's at stake,
it's not clear what's at stake,
like assuming that they're gonna make anyway.
This just becomes a more viral sales channel
or something like that and it feels, to us,
like just a misuse of the system.
This isn't something that we formalized anyway.
It's something we talk about a lot
and I don't know what all the answers will be
in every specific case and it's one of those policies
that you have to sort of respond to what's in front of you
and try to make what seem like the best decisions
for the long-term health of the platform.
And to date, all those who have put us
in the clear direction that that sort of thing
would be wrong and would be ultimately,
probably pretty damaging.
And especially in the product realm,
I think like if Penguin wanted to reissue,
a collection of short stories or something,
just because it came from Penguin,
I don't think would matter because it's a book.
And it's a cultural work on its own
and products are already a bit askew
within Kickstarter as being their own kind of world
and having slightly different dynamics
than you see in film or games or other categories.
So for products it becomes especially sensitive
and something that we really have to think about.
So at this point, yeah, I would definitely say no
to something like that.
-: And then just about my last question too that is
as it pertains to criteria from inside of Kickstarter,
what do you guys consider a big company?
How do you use that as-- -: This is part of why
there hasn't been a policy written.
It's a really hard question.
I don't know, I don't know.
-: Well, to to its credit, it obviously proves
the power of the platform that us,
as a billion-dollar company are looking at this saying,
"Should our customers or should us be looking
"at this as an opportunity to launch new products?"
-: If you look at Etsy, Etsy has a similar thing,
where Etsy says everything has to be vintage or handmade
and the handmade part is is a huge part of their community
but they had a question:
how do you determine what's handmade?
They created a rule that, when I first heard at the time,
seemed really arbitrary and strange
and now I'm like it's kind of brilliant,
which is that if you have more than two people
at your company, it is no longer handmade.
So they made it so there's not a judgment call,
so like there's this hard line to determine that thing,
which is a hard and fast rule and a difficult one
but they had to draw a line so that they could govern
their community in a way that seemed fair and just.
I have no idea where we're gonna end up on this one
but these people come to us and we tell them no.
That's been the story so far.
-: Cool, thanks. -: Yeah, no problem.
Yes sir.
I'll repeat his question, don't worry.
(students speaking faintly)
We do want the mic.
-: I just wanted to follow up on that
because the question about big companies launching products
on Kickstarter, it's actually something
that Sony did it before Kickstarter was around.
If they had a new gaming system,
they would take pre-orders for a couple months
before it was delivered.
So there really isn't a barrier, they're doing that.
They have an install base.
It's not really a problem for them
so now there are other companies may be more aware
of the possibility of pre-selling.
Pre-selling has been there before
and I think part of this is because Kickstarter
has sort of made this that a lot of people
in the culture or more aware of
but there were other crowdfunding sites,
there was a site called The Point that would do things
like raise money to fix the the vacant lot
in your neighborhood or stuff like that.
The line that you're trying to skirt,
those companies were there already.
I don't think it's really an issue.
-: Yeah, other places will step up and do everything
that we won't do, that already happens.
-: Or they'll do it themselves
they way that did. -: Or they'll do it themselves.
The people...
Ultimately, everyone's first choice is to be on Kickstarter
because it's the brand that people know
and they know it works and it's unclear for other places.
Back here.
-: We're reading about more companies going
to crowdfunding after VC
and some after significant rounds of VC.
Are you seeing more of that and what are your thoughts
specific to Kickstarter?
-: Yeah, we will see that sometimes.
A project will launch and we'll have no idea
and you'll see on TechCrunch or something
that they were venture backed and blah, blah, blah.
We don't have a policy on this yet.
We'll see if we end up having to make one.
We don't think of Kickstarter as being need-based.
It's like you can't only do that thing
if you don't have the cash.
I think that would be wrong but we do want it
to be a sincere effort to make something
and do it an interesting way and involve people
and stuff like that.
So I'm not sure what the end result will be there
but we're definitely feel very strongly
that there shouldn't be a litmus test
of need-based on posting a project or not.
-: A little meta-comment because actually,
I wish Nicholas Negroponte were here
because we had a hallway conversation, he had to leave.
But he said and he's actually written in the Wired article,
where I'm in it with him that big ideas
can't come from startups.
And he was actually talking about a VC that we both know,
giving advice to a startup saying, "No, no, no.
"You gotta get profitable.
"You've gotta focus, you've gotta do this,"
and basically making the big idea kind of small
but I argue with him a lot and I wish he were here
because I'd argue with him to his face
but he did say to Yancey to his face,
but you kind of break my model
because this is a big idea that came from a start-up.
But if you listen to the Yancey's story,
it's kind of a big idea but it was not really a big idea
in the sense of the big idea like,
let's eliminate illiteracy and things like that
and what's really interesting is there's two things
I would say, first of all, there's a different category
of VC startup.
We can talk about Union Square and stuff.
So Fred Wilson from Union Square founder of Twitter,
a good friend of mine and I was just looking at my email
and it was like, I remember I talked to Perry on the phone
it says, "Talked to Perry, liked him and the idea
"and the others, count me in."
And then he says, "Round has oversubscribed
"and we don't need anyone but we want you."
And what's interesting is it's a version of crowdfunding,
in that it's basically, I trust Fred,
I met the folks, I listen to the story.
I didn't look at a business plan.
I had made one phone call but what's interesting
is there's two things or a couple things going on here.
One is that the new generation of VCs aren't so focused
on who are your customers, blah, blah, blah, blah
and that's one of the differences I noticed also
on the East Coast and then in science.
With Twitter, I remember, it was really, at the beginning,
it wasn't about making money.
It was about how do you reduce the friction,
how do we get adoption?
I've been on the Knight News Challenge with you,
Yancey kind of acts like he doesn't care about anything.
When he's in the mode of caring about everything,
he cares about everything but what's interesting also,
his kind of nonchalant way about acting like,
that's actually called focus.
The other thing, in a way is like,
when Twitter is single-mindedly focused,
just on making it frictionless and plain,
that's what made that a great product.
And I think also the focus and not worrying
about having 1000 economists and overthinking it
and I think at the Media Lab,
because I think 70% of the students here wanna be involved
in entrepreneurship, so it's like I'm kind of telling it
to our kids here as well but
when you do a start-ups,
there are some startups like a E Ink
that start with real science and big ideas
but there are also startups
that is an idea that's percolating in somebody's head
and you hang out with your waiter
and Fred makes a phone call and we get together,
it's "Hey guys, it sounds like a cool idea.
"I hope this is good as the last one we did together."
I'm just trying to emphasize that I don't think
we should get so obsessed with coming up
with the perfect big idea and in these moon shots
because sometimes, a little story, a little interesting idea
with the right kind of motivation, focus and a lot of luck,
can become a big idea that evolves.
To turn it into a question
because you were there talking Nicholas,
I didn't hear the whole conversation
but do you find your investors,
as a startups constraining you and making you
do things or do you find them generally--
-: You're the worst of them.
No, no, not at all.
It's going well.
So obviously it's different when things are going well
and we haven't experienced things not going well.
So maybe I'm not qualified to talk until that happens.
We're fortunate in that-- -: When it doesn't go well
they just stop calling you. -: They just stop calling.
That's all right, we like that too.
I don't know.
We've been fortunate in that we do have a source of revenue
and that we are able to make decisions based
on what we think is right
and we're a founder controlled company and we'll always be.
So we're in a good position to not have
to deal with a lot of the harder things
that a lot of other young companies have to deal with
and I feel fortunate to not know that pain.
-: Anybody else?
I guess we'll take the last question
if there is or otherwise.
-: Here you go.
-: Again, I have friends in Brazil
that has this kind of website (speaking in foreign language)
I don't know if you know
but I want to know do you have any suggestion
for this kind of website like what to do
and what not to do or you can--
-: I have no idea, (chuckles) I have no idea.
I would not be good at giving advice.
-: This website (speaks foreign language)
they don't charge, they don't ask for--
-: Is it like Kickstarter, is it that kind of site?
-: Yeah. -: Yeah.
-: Just get good creators to use your service, that's it.
Just find projects that you're excited about
and try to convince them to put them on your site.
That's about as good as you can do, I think.
-: Okay, cool, thanks Yancey.
-: Thanks for coming out guys.
(audience applause)