Kickstarter.com's CASE STUDY

In the ever-evolving landscape of financial services, there stands a platform that has revolutionized the way creative projects come to life. Kickstarter.com, established in 2009 in Brooklyn, New York, has redefined crowdfunding, leveraging community engagement and innovative financial mechanisms to foster creativity. Today, we explore Kickstarter's journey, its unique business model, and the impact it has had on countless creators and backers across the globe.

The Genesis of Kickstarter

Kickstarter was born out of a simple yet profound idea: to help bring creative projects to life. Founders Perry Chen, Yancey Strickler, and Charles Adler envisioned a platform where creators could present their ideas directly to the public, bypassing traditional gatekeepers. Since its inception, Kickstarter has grown into a public-benefit corporation with a mission to support and celebrate creativity in all its forms.
The platform's philosophy hinges on democratizing access to funding. By enabling creators to connect directly with backers, Kickstarter removes barriers that often prevent innovative ideas from seeing the light of day. This vision has resonated with millions, as evidenced by the platform's staggering success: over 205,000 projects successfully funded and more than $6 billion pledged as of 2023 (Kickstarter Stats).

The All-or-Nothing Approach: A Game Changer

One of Kickstarter's most distinctive features is its all-or-nothing funding model. Creators set a funding goal and a deadline. If the project meets its goal within the allotted time, the funds are collected, and the project proceeds. If the goal is not met, no money changes hands. This approach serves multiple purposes:
1. Reduces Risk: Both creators and backers face less financial risk, as funds are only exchanged if sufficient interest and support exist.
2. Creates Urgency: The ticking clock encourages backers to act quickly, fostering a sense of urgency and shared purpose.
3. Builds Trust: Transparency is maintained as backers know their money will only be used if the project is viable.
According to Harvard Business Review, such models create a "dynamic and committed community" where trust is a central pillar (HBR, 2020).

Revenue Model: Alignment with Success

Kickstarter's revenue model is as straightforward as it is effective. The company charges a 5% fee on the total funds raised for successfully funded projects. Additionally, payment processing fees—typically ranging from 3% to 5%—are applied by third-party services like Stripe and PayPal. This fee structure incentivizes success; Kickstarter only generates revenue when projects achieve their funding goals, aligning its interests with those of the creators.
The success-based model ensures that everyone has skin in the game, from the Kickstarter team to the creators and backers. This alignment fosters a high level of accountability and motivation, driving the platform's sustained growth and impact.

Case Study: Exploding Kittens

To understand Kickstarter's real-world impact, we turn to one of its most famous success stories: Exploding Kittens. Created by Elan Lee, Shane Small, and Matthew Inman, this quirky card game sought $10,000 in funding. The project went viral, amassing over $8.7 million from 219,382 backers (Kickstarter Stats).
Several factors contributed to Exploding Kittens' phenomenal success:
1. Engaging Concept: The game's unique and humorous premise captivated a broad audience. 2. Strong Community Engagement: The creators actively engaged with their backers, providing updates and fostering a sense of community. 3. Effective Use of Social Media: Leveraging Matthew Inman's popular webcomic, The Oatmeal, the creators amplified their reach and visibility.
The success of Exploding Kittens exemplifies how Kickstarter can transform creative aspirations into tangible products through effective communication, community building, and leveraging existing networks.

Kickstarter's Broader Impact

Kickstarter's influence extends far beyond individual projects. By empowering creators, it has democratized access to funding, allowing a diverse array of voices and ideas to flourish. This democratization is not just about finances; it's about cultural impact and self-actualization. For many creators, launching a project on Kickstarter is a life-changing experience that provides hope, motivation, and a sense of belonging.
Moreover, backers on Kickstarter enjoy rewards that go beyond simply receiving a product. They earn badge value, exclusive access, and the attractiveness of being part of something innovative from its inception. This emotional connection between creators and backers is a cornerstone of Kickstarter's enduring appeal.

Challenges and Evolution

Despite its many successes, Kickstarter has faced challenges. The nature of crowdfunding means that not all projects come to fruition as planned, leading to occasional disillusionment among backers. Transparency and communication are crucial in mitigating such issues.
To continuously improve, Kickstarter has focused on enhancing its platform infrastructure, expanding its customer support resources, and refining its project vetting processes. By staying true to its mission while adapting to the evolving needs of its community, Kickstarter remains a dynamic and resilient player in the crowdfunding arena.

The Future of Kickstarter

As we look ahead, Kickstarter's journey is far from over. With advancements in technology and shifts in creative industries, the platform is poised to explore new frontiers. Whether it's embracing emerging trends in virtual reality, supporting groundbreaking tech innovations, or championing grassroots art movements, Kickstarter will continue to be a vital conduit for creative expression.
In conclusion, Kickstarter.com is more than just a crowdfunding platform. It's a vibrant ecosystem where creativity, community, and commerce intersect. Through its unique all-or-nothing model, alignment of interests, and commitment to fostering creative endeavors, Kickstarter has not only changed the way projects are funded but also enriched the cultural landscape on a global scale. As we continue to support and celebrate creativity, we eagerly anticipate the next wave of groundbreaking ideas that Kickstarter will help bring to life.