Case 9 Kickstarter and Crowdfunding 2019

Note - single response answers will be given a zero and not count. At this point, and per the syllabus, you should know how to answer these questions; give it some thought. Please submit via Canvas and if you have any issues submitting, do not submit to me via email, please contact IT and resolve the issue. I am not IT : )

1. What makes Kickstarter entrepreneurial, and how is this strategy working for them?
2. What approach does Kickstarter appear to employ regarding innovation, and how should this be managed?
3. What is it about the initial strategic analysis process that helps a firm identify a business opportunity?
4. How might the external environment affect Kickstarter's entrepreneurial strategy?

CASE 9 KICKSTARTER AND CROWDFUNDING 2019* In 2019, sixteen Kickstarter-funded films were heading among the top 10 best crowdfunding sites, with over to the SXSW Film Festival. Kickstarter had a record- 159,246 successfully funded projects, over 15 million back- breaking year for games and witnessed some changes in its ers, and over $4 billion in pledged dollars; 340 projects had management. Co-founder Perry Chen stepped down from raised over $1 million each. Kickstarter also had a success his role as CEO, having taken over from co-founder, rate of nearly 37 percent; however, 63 percent of the time Yancey Strickler, only two years earlier. In March 2019, the backers got nothing in return for their donations. What Aziz Hasan, the head of Kickstarter's design and product was this crowdfunding thing all about, and was Kickstarter teams was made interim CEO. While Chen had been at truly a boon for entrepreneurs, or a bust for backers? the helm, Kickstarter lost about 50 out of 120 Kickstarter "Kickstarter = Dumb people giving money to anony- employees. Among the departed were seven of the eight mous people in hope of some goodies in an unspecified members of Strickler's executive team. 2 In interviews, amount of time." So read a comment posted in response to employees said Chen strongly exerted his will on the a story about one nine-year-old girl's Kickstarter campaign. company-making sudden changes to planned-out Kick- Mackenzie Wilson wanted to raise $829 so that she could starter features, scrapping project timelines at the last min- go to computer camp and create her own video game. ute, forcing out highly respected employees, and trying to (She said her older brothers were making fun of her, and shake up office culture in ways that struck the rank and file she wanted to prove that girls could do "tech stuff," too.) as simply bizarre. Although Kickstarter is known to be The trouble was that Kickstarter rules said someone had to be Chen's brainchild, the future of the crowdfunding platform at least 18 years old in order to list a project, so Mackenzie's looks shaky with Chen's method of alienating and replace mom, Susan Wilson, created the information listing. Susan ing the employees. Wilson was a Harvard graduate, a known entrepreneur, and As a result of advancements in technology and had allegedly promoted her daughter's Kickstarter campaign worldwide adoption of media platforms, the concept of by tweeting celebrities like Lady Gaga and Ellen DeGeneres "crowdfunding" became a norm. According to Wharton to elicit support. School researcher Ethan Mollick, crowdfunding allowed Within 24 hours of the project launch, it not only had "founders of for-profit, artistic, and cultural ventures to reached its $829 goal but was on its way to getting 1,247 fund their efforts by drawing on relatively small contribu- backers and $22,562 in pledges. Despite the success of a tions from a relatively large number of individuals using campaign that raised a lot of money, Wilson and her family the Internet, without standard financial intermediaries."4 received negative responses. The majority of the negative It was considered "a novel method for funding a variety of responses seemed to come from those who believed that new ventures," but it was not without its problems. Susan Wilson had misrepresented the nature of the project, Although billions of dollars had been raised for projects that she had acted in bad faith-intending to profit from her ranging from something as small as an artist's video diary daughter's story-and thereby had violated Kickstarter's to large endeavors, such as the development of a new prod- project guidelines. It also received headlines because of the uct for accessing e-mail or an award-winning film docu- extreme public response-accusations of a scam and death mentary, very little was known about the kinds of threats against Wilson and her family. mechanisms that made funding efforts successful or Kickstarter clearly stated that its crowdfunding service whether "existing projects ultimately deliver the products could not be used for "charity or cause funding" such as an they promise."5 awareness campaign or scholarship; nor could a project be One example of this new phenomenon in entrepreneur- used to "fund my life"-for example, going on vacation, buy- ship was the story of Kickstarter. As of March 2019, ing a new camera, or paying for tuition. And a project had according to DigitalTrends.com, Kickstarter ranked first to have a clear goal: "like making an album, a book, or a work of art. . . . A project is not open-ended. Starting a busi- * This case was prepared by graduate student Eric Engelson of Pace University, ness, for example, does not qualify as a project." " In addi- Professor Alan B. Eisner of Pace University, Professor Dan Baugher of Pace tion, for Kickstarter to maintain its reputation as one of the University, Associate Professor Pauline Assenza, Western Connecticut State top crowdfunding services, it had to make sure it kept con- University, and graduate student Sushmitha Mudda of Pace University. This case was solely based on library research and was developed for class discussion trol of how the projects were promoted: "Sharing your proj- rather than to illustrate either effective or ineffective handling of an ect with friends, fans, and followers is one thing, but administrative situation. Copyright @ 2019 Alan B. Eisner. invading inboxes and social networks is another." 10 C52 CASE 9 :: KICKSTARTER AND CROWDFUNDING 2019Kickstarter responded to comments on the Wilson proj- ect by affirming its support, saying, \"Kickstarter is a fund- ing platform for creative projects. The goal of this project is to create a video game, which backers are offered for a $10 pledge. On Kickstarter backers ultimately decide the validity and worthiness of a project by whether they decide to fund it.\"11 However, backers and Kickstarter fans were concerned, with one user commenting, \"It's all of our jobs to be on the lookout for shady Kickstarters and personally I don't want to see it devolve into a make-a-wish founda- tion for already privileged kids to learn how to sidestep rules of a website to profit.\"12 And therein lies Kickstarter's dilemmahow to provide a service that allowed funding for obvious commercial ventures while also providing safe- guards for backers. Kickstarter remained a service business, collecting 5 percent of successfully funded projects as a fee for this service, and had kept itself hands-off otherwise. However, in addition to receiving comments such as the ones in response to the Wilsons' project, Kickstarter came under fire for providing no guarantees that funded projects would actually produce promised items or deliver on the project's goals. Kickstarter's three founders had to create a specific blog post titled \"Kickstarter Is Not a Store\"to remind back- ers that the ventures were projects and, as such, would be subject to delays, sometimes long ones, while in develop- ment.13 Kickstarter made it clear that it was the project cre- ators' responsibility to complete projects and that it would pull projects from its web pages if project promises were obviously unrealistic or violated copyright or patent law, but otherwise it gave no other protection to backers. And even if a project could not fully deliver, Kickstarter col- lected its fee. By keeping its business model as a fee-for- service commercial venture, was it in danger of losing its reputation and therefore its future business stream? More competitors were entering the crowdfunding, crowd investing, or peer-to-peer lending space, partly because of the Jumpstart Our Business Startups (JOBS) Act passed by Congress in April 2012. The JOBS Act was designed to encourage small business and start-up funding by easing federal regulations, allowing individuals to become investors; and crowdfunding by the likes of Kickstarter was a \"major catalyst in shifting the way small businesses\" oper- ated and found start-up capital. 1" Crowdsourcing had already changed the way businesses interacted with consumers; crowdfunding needed to figure out " how to build a commu- nity of supporters before, during, and after\" a business launched.\" But Kickstarter's founders seemed to believe \"a big part of the value backers enjoy throughout the Kick- starter experience\" was to get a closer look at the creative process as the project comes to life.\" Kickstarter seemed to want to be a place where people could \"participate in some- thing,\" something they \"held dear,\" and ultimately become a \"cultural institution\" that would outlive its founders.\" Was that the vision of a commercial venture, or was it a wish to eventually become a not-for-profit legitimate cause-funding organization? What did Kickstarter want to be when it ulti- mately grew up? The Kickstarter Business Model By 2019, Kickstarter had become a popular middleman act- ing as a go-between, connecting the entrepreneur and the capital needed to turn an idea into a reality. The Kickstarter platform had launched on April 28, 2009, created by Perry Chen, Yancey Strickler, and Charles Adler, and was one of the first to introduce the new concept of crowdfunding: raising capital from the general public in small denomina- tions. In a social media-lled world, an opportunity had been recognizedyou could count on your peers to help you fund your big idea. Many creators, who were young, inexpe- rienced, low on capital, or any combination of these, turned to websites such as Kickstarter for nancial support for their projects. The site acted as a channel, enabling them to call on their friends, family, and other intrigued peers to help them raise money. When establishing a listing on Kickstarter, the creator could place his or her project offering in one of 15 different categories: art, comics, crafts, dance, design, fashion, film & video, food, journalism, games, music, photography, pub- lishing, technology, and theater. The project \"owner\" filled out some basic information, and the listing was on its way. However, certain standards had to be met before the listing could go live. If the project met those requirements, it was approved by the Kickstarter team and listed. The guidelines were surprisingly basic and straightfor- ward. First and foremost, the listing had to be for a project. As mentioned previously, it could not be for a charity or involve cause funding, nor could it be a \"fund my life\" kind of a project. The guidelines also disallowed prohibited con- tent. Other than that, the project simply had to t into one of the 15 designated categories. More recently, however, a few more cautious measures were added to ensure that only real and recognizable listings were created (see the section on rules and regulations later in this case). The project cre- ator now had to set a deadline for the fund-raising, as well as a monetary goal, stating how much money he or she hoped to raise for the project. If that goal was met, the funds were then transferred to the project creatorj'owner. If the goal was not met, however, all donating parties were given refunds and the project was not funded. Additionally, the project owner could create rewards as incentives for different levels of donations, to be received by the donor if the project met its goal and was therefore lnded. The more a donor pledged, the better the reward, which was usually related in some way to the project at hand, such as being the first backer to receive the finished product. If the project succeeded in reaching its goal, payment was collected through Amazon. The project creator had to have an active Amazon Payments account when setting up his or her project. If a project was funded successfully, the money was transferred from the backers' credit cards to the creator's Amazon Payments account. lfthe project was not funded successfully, Amazon released the funds back to the project was put on hold. Adler moved to San Francisco to the backers' credit cards and no charges were issued; do some freelance work, and Strickler remained at his Kickstarter never actually possessed the funds at all. Once a day job. project was funded successfully, Kickstarter took 5 percent Finally, in the summer of 2008, Chen was introduced to of the total funds raised, while Amazon took around 3 to Andy Baio, who joined the team remotely as an adviser, 5 percent for its services. After both parties deducted since he was living in Portland, Oregon, at the time. Soon their commissions, the project creator/owner could still after, Baio and Adler contacted some developers, including expect a payout of about 90 percent of the total money that Lance Ivy in Walla Walla, Washington, and the site started was raised. On January 6, 2015, Amazon decided to discon- to take shape. Although the team was scattered throughout tinue its payment service with Kickstarter. Kickstarter the country, they were well connected through Skype and replaced Amazon with Stripe Payment, a service similar to e-mail and finally began building the web portal. By PayPal. For project creators, Stripe made it easier to April 28, 2009, Kickstarter had been created and was collect the funds as it did not require setting up a separate launched to the public. The idea for creating a new channel account like Amazon did, and backers could check out for artistic entrepreneurs of all kinds to explore their faster using Stripe to pay directly via bank accounts or creativity was finally realized. 23 credit cards. It allowed Kickstarter to have a complete con- trol on backers' checkout experience and access to raise Crowdfunding Competition funds anywhere in the world. Although Kickstarter had become a well-known name in crowdfunding, many other companies had had the same Kickstarter History idea. Not all of them had attracted as much media atten- As previously mentioned, the company was launched in tion, but this meant that they had also avoided some of the April 2009 by its three co-founders: Perry Chen, Yancey negative press. Being a market follower rather than leader Strickler, and Charles Adler. Originally based in New York gave Kickstarter a prime opportunity to maintain a clean City, Kickstarter initially raised $10 million from Union track record with the media because the company was able Square Ventures and angel investors, including Jack to avoid the mistakes made by other similar businesses. Dorsey of Twitter, Zach Klein of Vimeo, Scott Heiferman One of the better-known Kickstarter competitors was of Meetup, and Caterina Fake of Flickr.20 It all started with Indiegogo, founded in January 2008 in San Francisco. the hope of a musical success-a $20,000 late-night concert Indiegogo was initially funded with $1.5 million from inves- that Perry Chen was trying to organize at the 2002 New tors such as Zynga co-founder Steve Schoettler. By June Orleans Jazz Fest. Chen had hopes of bringing a pair of 2012, the company had attracted over 100,000 projects DJs into town to perform. He had found a perfect venue from 196 countries. Aiming to "make an even bigger for the concert and even gotten in touch with the DJs' impact," in 2012 Indiegogo raised an additional $15 million management, yet the show never happened. The problem in a "Series A" private equity stock offering. 24 CEO Slava was the lack of capital, and, even if he had found willing Rubin said that the money was needed mostly to hire, build backers, Chen had wondered what he would do if the show out, and increase resources to take on other crowdsourcing was unable to attract sufficient interest to pay back any competitors such as Kickstarter. However, while Kickstarter investment. focused on individuals' creative projects, Indiegogo was This dilemma brought Chen to the realization that the much more business-oriented. Projects on Indiegogo were world needed a better way to fund the arts. He thought to not regulated as they were on Kickstarter. Indiegogo used himself, "What if people could go to a site and pledge to buy an algorithm that decided which projects to promote on the tickets for a show? And if enough money was pledged they basis of activity and engagement metrics like funding would be charged and the show would happen. If not, it velocity.25 wouldn't." 21 Although Chen loved this initial idea, he put it Additionally, Indiegogo projects followed the "keep it on the back burner, being more focused on making music and all" model-all funds collected were handed over to the proj- not on starting an Internet company. Three years later, in ect creator, regardless of any goal achievement. If the proj- 2005, Chen moved back to New York and began to reconsider ect fund-raising goal was never met, or the project's the potential for his business idea, but he was unsure how to objectives were never achieved, it was up to the project go about building it. That fall, Chen met Yancey creator to refund collected funds to the contributors. Strickler, the editor-in-chief of eMusic, through a mutual Indiegogo was also available for use internationally, while friend and approached him with the idea of Kickstarter. Kickstarter required backers to have either a U.S. or UK Strickler was intrigued, and the two began brainstorming. bank account.26 Then, about a year later, Chen was introduced to Charles Other online crowdfunding companies, which raised Adler. Adler was also interested and began working with funds for either charitable or creative projects, included Chen and Strickler.22 After months of work, the team had ArtistShare for musicians and Fundly for charitable proj- created specifications for an Internet site, yet one major ects and political campaigns. Meg Whitman used Fundly to problem remained-none of them knew HTML coding, so raise $20 million for her 2010 campaign for governor ofCalifornia.28 Illustrating the degree of competition, ArtistShare and Kickstarter had been in a patent dispute since 2011 over ownership of the \"methods and apparatuses for financing and marketing a creative work,\" with ArtistShare claiming Kickstarter infringement.\" Mean- while, similar companies that created some buzz in the area of business investment were Crowdfunder and Grow VC. While only in start-up mode, Crowdfunder had made enough noise to grab some attention. This platform enabled funders to participate in three different ways: they could simply donate to a project, lend to a project and receive a return, or purchase equity. However, the third option purchasing equity through crowdfundingwwas still not allowed in the United States as of 2013.30 Grow VC, similar to Kickstarter, made funds accessible to the company or entrepreneur only when the goal had been reached. One important difference between the two was that Grow VC enabled companies to collect monthly installments from investors, allowing a growing business to collect a continuous influx of funds rather than just a one- time investment. The cap for funding was set at $1 mil- lion.31 Other recognizable competitors were Rockethub, EarlyShares, and Bolstr in the United States; CrowdCube in the United Kingdom; and Symbid, based in the Nether- lands. These were only a few of the more publicized new- comers to the industrythere were at least 50 legitimate crowdfunding platforms operating worldwide.32 Kickstarter Successes By March 2019, Kickstarter had launched 437,085 projects, raising $4.16 billion, of which $3.70 billion was successfully collected by project owners, $429 million was unsuccessful, and $39 million was currently in \"live\" donation status on the site.33 On February 8, 2012, the first project to ever get a million dollars funded from the site was a project in the design category, an iPod dock created by ElevationLab. Its goal was set at $75,000, and backers reached this goal al- most instantly, raising a total of $1,464,706. However, as impressive as this feat was, its top-funding status was short- lived. Six hours later, in the game category, Double Fine beat that goalreceiving $3,336,371 to fund its new adven- ture game, far exceeding the initial request for $400,000?1 On March 27, 2015, a California-based smartwatch com- pany, Pebble Time, ran a record-breaking Kickstarter cam- paign by raising a total of $20,338,986.35 The initial goal was to raise $500,000 yet Pebble Time was able to raise the first million dollars in less than an hour. Pebble Time was founded in 2012, and since then the company had been working to perfect its smartwatch that offered battery time of about 10 days and more than 6,500 applications via an open platform app store. However, one of the pioneers in the tness tracker and smartwatch industry, Fitbit, acquired the intellectual property and hired key personnel from Peb- ble Technology Corp. in December 2016. Other notable projects with over $1 million in funding included the TikTok and LunaTik multitouch watch kits and the Coolest Cooler in the design category; the OUYA TV console and Project Eternity in the games category; the FORM] 3-D printer and the Oculus Rift virtual reality headset in the technology category; and a new Amanda Palmer record, art book, and tour in the music category. Gustin premium menswear and Ministry of Supply men's dress shirts, in the fashion category, were notably successful offerings with over $400,000 in pledges.36 In the movie cat- egory, in 2013, Inocente became the rst Kickstarter crowd- funded film to win an Oscar-for Best Documentary (Short Subject)37 and Kickstarter backers donated over $2 million in 12 hours to fund a movie based on the popular Veronica Mars franchise.38 Kickstarter was becoming a source of ma- jor support for independent films. According to the com- pany, as of 2013 it had facilitated over $100 million in donations to various \"indie\" films and had funded 10 per- cent of all the films shown at the 2013 Sundance Film Festival.39 These projects made contributions to Kickstarter's busi- ness model. Even with an office in New York City, large amounts of capital raised, and about 125 employees, Kick- starter had to have been profitable. Based on the 2018 sta- tistics, Kickstarter took a 5 percent cut from the total money that was funded on the website. Kickstarter Failures However, as in all sectors of capital investment, some Kickstarter projects did not work out as planned. In the world of start-ups, many venture capitalists or angel investors made investments in projects that were inher- ently risky. Some were lucky and achieved their intended goals or did even better. Others fell short. There were many possible reasons for the failures, including lack of industry knowledge, unrealistic projections of cost, lack of managerial experience, manufacturing capabilities, or simply a lack of competence for the task at hand. These possibilities existed for Kickstarter projects as well, but in the Kickstarter model, investorsjbackersjdonators did not \"own\" anything; project creators kept ownership of their work. As Kickstarter pointed out, \"Backers are sup- porting projects to help them come to life, not to profit financially. \"40 This disclaimer did not stop backers or the media from highlighting Kickstarter's risks. Eyez was one of the better- known project failures on Kickstarter. More than 2,000 backers collectively contributed more than $300,000 to the entrepreneurs developing the high-tech glasses, meant for recording live video. Eyez's product creators promised delivery of the glasses ahead of the fall 2011 goal, yet by 2013 Eye: glasses still were not being produced and none of the individual backers had received a pair. Meanwhile, the entrepreneurs had stopped providing online updates on the project and would not answer questions from backers.\"l Another prominent failed project was the Skarp campaign in 2015, which raised about $4 million. The project prom- ised to develop and offer a razor that used a laser beam instead of a traditional blade. The Skarp campaign also showed a video demonstrating the procedure of laser razor to cut hair. However, in reality the prototype of the laser razor was far from a properly functioning product.42 Others, such as the group behind MYTHIC, a nonexistent game from an imaginary team, continued to try to scam the crowdfunding scene.\" A major challenge to Kickstarter's business model was related to intellectual property rights. It was probable that anyone with a good idea trying to raise capital through Kickstarter would discover that his or her idea was already stolen by merchants in China. Yekutiel Sherman, an Israeli entrepreneur, spent years developing an innovative smartphone case that unfolded into a selfie stick. In December 2015, Sherman started a Kickstarter campaign, hoping to raise funds to capitalize on the new product. A week later, Sherman found that his designed selfie stick was already on sale by vendors across China. People around the world could buy the new selfie stick using on- line sites including eBay. Ongoing IssuesBackers' Concerns and Rules and Regulations Despite the success Kickstarter had achieved, the company was under re for many things, particularly regarding false projects, the collection of funds with no end product, and the failure of backers to receive the stated rewards set by project creators. Kickstarter followed the \"all or nothing\" approach to fundingpledged dollars were collected only if the fund-raising goal was met. In the beginning, Kickstarter tried to explain that the company had no control over the donated funds once these funds were in the hands of the developerthere was no guarantee of product or project \"delivery.\" Additionally, if the fund-raising goal was met but the project never made it to fruition, Kickstarter had no ability to issue refunds. These explanations did not keep backers from complaining of \"delays, deception, and bro- ken promises?\" In 2012, the Kickstarter founders felt it was necessary to reiterate \"Kickstarter Is Not a Store" and point out, yet again, that \"in addition to rewards, a big part of the value backers enjoy throughout the Kickstarter experience is get- ting a closer look at the creative process as the project comes to life.\"45 Kickstarter then implemented a new set of rules, designed to prevent creators from promising a prod- uct they could not deliver. The goal, Kickstarter said, was to help prevent entrepreneurs from overpromising and disap- pointing backers by not delivering. By forcing creators to be transparent about their progress, Kickstarter hoped to dis- courage unrealistic projects and encourage the participa- tion of more creative individuals who had the skills to ship products as promised. These new rules required Kickstarter's project creators to list all potential problems involved in seeing their proj- ects through to completion; to submit proper supporting materialsno simulations or \"renderings,\" just technical drawings or photos of the actual current prototype; and to create a \"reasonable\" reward system in which backers received a reward based on their level of participation, which in most cases included a working version of the proj- ect in question. Kickstarter prohibited the use of multiple quantities at any reward level: Kickstarter was not a store, but an opportunity to invest in good ideas. The company also included the use of investors' funds in the project cre- ator agreement. The regulations stated that if funds were collected, the creator was required to use those funds toward the creation of the project. If the funds were used for any other purpose, legal repercussions would follow.\" In 2013 Kickstarter did a \"major overha \" on the set of tools project creators used to communicate with backers, including a \"rewards sent\" checklist, a tool to survey backers regarding rewards, and a project \" dashboard\" so that creators could track their progress.\" Even if Kickstarter was able to sustain its success with the implementation of tougher approval policies on its end, the future of the size and success of projects was also to be determined by the government and its ability to police the crowdfunding world through its own set of regulations. Recent federal legislation showed the government's inten- tions to do just that. The JOBS Act Signed into law in April 2012 by President Obama, the Jumpstart Our Business Startups (JOBS) Act supported entrepreneurship and the growth of small businesses in the United States and emphasized the new phenomenon of crowdfunding. The act eased federal regulations in regard to crowdfunding by allowing individuals to become investors in new business efforts. However, it also set out specific pro- visions to regulate just how much funding was acceptable, in order to ensure the financial safety and security of the investors. The new act stated that, as of January 2013, an equity-based company could raise no more than $1 million a year. Additionally, a company could sell to investors only through a middlemana broker or website that was regis- tered with the Securities and Exchange Commission (SEC). The middleman could sell only shares that had originated from the company. The JOBS Act did not yet apply to Kickstarter, because there were no equity sales under its current business modelon its platform, the project creator maintained 100 percent ownership of the product or service.48 With no cap to investments and minimal federal regulations, people could be more inclined to contribute to a Kickstarter proj- ect than invest in projects from an equity investment-based competitor. The Future for Kickstarter During the early days of Kickstarter, Perry Chen, the co-founder and person responsible for the idea behind Kickstarter, spoke about Kickstarter's optimistic future. Chen talked about funding business start-ups and stated that Kickstarter was not interested in that model: "We're 4. Mollick, E. R. 2013. The dynamics of crowdfunding: Determinants of going to keep funding creative projects in the way we cur- success and failure. University of Pennsylvania Wharton School, rently do it. We're not gearing up for the equity wave if it March 25, http://ssrn.com/abstract52088298 or http://dx.doi.org/ 10.2139/ssrn.2088298; from the abstract. comes. The real disruption is doing it without equity."49 5. Ibid, p. 1. In March 2019, Perry Chen stepped down from his role 6. From www.kickstarter.com/help/stats. as CEO after two years and Aziz Hasan, the head of Kick- 7. Reader comment by Devlin 1776, attached to news story: Bindley, K. starter's design and product teams was made interim CEO. 2013. 9-year-old's $20,000 Kickstarter campaign draws scam Chen only planned to return as CEO for six months to help accusations. Huffington Post, March 26, www.huffingtonpost.com/ with the transition in leadership. In a blog post on the com- 013/03/26/9-year-old-kickstarter-campaign_n_2949294.html# slide 51240691. pany website, Chen wrote, "Those months quickly became 8. See the full Kickstarter project listing, plus current status, and both two years dedicated to developing a better way to deliver on backer and general comments at www.kickstarter.com/projects/ the core aspects of our service through a robust operating susanwilson/9-year-old-building-an-rpg-to-prove-her-brothers-w. system, a strong product, and the team we have assembled 9. See Kickstarter funding guidelines at www.kickstarter.com/help/ at Kickstarter today."50 guidelines. See also comments on the Wilson project as a scam: Multi- Chen's decision to resign followed the company staff's millionaire scams Kickstarter for over $22,000 - sending daughter to game dev camp, http://imgur.com/zwyRWCa. announcement to unionize with the Office and Professional 10. Ibid. Employees International Union (OPEIU) Local 153. Kick- 11. Bindley, K. 2013. 9-year-old's $20,000 Kickstarter campaign draws starter staff said they were forming a union to promote scam accusations. Huffington Post, March 26, www.huffingtonpost. "inclusion and solidarity, transparency and accountability," com/2013/03/26/9-year-old-kickstarter-campaign_n_2949294 and gain "a seat at the table." In April 2018, BuzzFeed html#slide51240691 News reported that the company was in turmoil under 12. Ibid Chen's leadership. At the time of BuzzFeed's reporting, 13. See Chen, P., Strickler, Y., & Adler, C. 2012. Kickstarter is not a store. September 20, www.kickstarter.com/blog/kickstarter-is- nearly 50 of the company's 120 staff had reportedly left, not-a-store. including seven out of eight members of the company's 14. Farrell, J. 2012. The JOBS Act: What startups and small businesses executive team. $2 need to know. Forbes, September 9, www.forbes.com/sites/work-in- In April 2019, Kickstarter partnered with Kodansha, progress/2012/09/21/the-jobs-act-what-startups-and-small-businesses- one of Japan's leading publishers, to support creators in need-to-know-infographic/. 15. Ibid. Japan. Through the partnership, Kickstarter aims to provide 16. An, J. 2013. Dude, where's my Kickstarter stuff? Dealing with delays, Kodansha's team with the tools, knowledge, and resources deception and broken promises. Digital Trends, March 20, www. to help creators in Japan bring projects to life on the Kick- digitaltrends.com/social-media/dude-wheres-my-kickstarter-stuff/ starter platform." The company also celebrated as backers #ixzz20mMqQ4dq had pledged more than $1 billion to Games projects on 17. From Strickler, Y. 2013. Talk given at Expand Engadget Conference, Kickstarter. Since launching in 2009, the Games category March 16, www.youtube.com/watch?v5thlaPwpobMk. Also see the conversation liveblog at www.engadget.com/2013/03/16/kickstarter- has grown steadily, helping titles like The Banner Saga, yancey-strickler-expand-liveblog/; and the interview with Myriam Joire, Exploding Kittens, Darkest Dungeon, Kingdom Death, Engadget editor, linked at the Huffington Post story at www. Shovel Knight, and many more. $4 huffingtonpost.com/2013/03/26/9-year-old-kickstarter-campaign_ Although its funded projects are heading to good places, n_2949294.html#slide51240691. what is Kickstarter heading toward? With disruptions from 18. Hess, K. 2013. Despite its popularity, I hate Kickstarter. ZDnet, November 22, https://www.zdnet.com/article/despite-its-popularity-i- inside the company and outside, would it be able to opti- hate-kickstarter/. mize its business model for better? While it seemed to have 19. The Kickstarter Blog. 2015. Making payments easier for creators and a clear mission and was certainly profitable, as Wharton backers. Jan 6, https://www.kickstarter.com/blog/making-payments- School researcher Mollick warned, "Crowdfunding repre- easier-for-creators-and-backers. sents a potentially disruptive change in the way that new 20. Kafka, P. 2011. Kickstarter fesses up: The crowdsourcing funding ventures are funded." Going forward, the Kickstarter start-up has funding, too. All Things D, March 17, allthingsd. com/20110317/kickstarter-fesses-up-the-crowd-sourced-funding-startup- founders needed to consider whether they had the right has-funding-too/. business model for the future. 21. See Kickstarter Pressroom at www.kickstarter.com/press. 22. Ibid. 23. Ibid. ENDNOTES 24. Taylor, C. 2012. Indiegogo raises $15 million series A to make 1. Goggin, Benjamin. 2019. CEO and co-founder of crowdfunding giant crowdfunding go mainstream. TechCrunch.com, June 6, techcrunch. Kickstarter resigns amid staff unionization effort. Business Insider com/2012/06/06/indiegogo-funding-15-million-crowdfunding/. March 19, https://www.businessinsider.com/kickstarter-perry-chen- 25. Jeffries, A. 2012. Kickstarter competitor Indiegogo raises $15M, resigns-as-ceo-co-founder-2019-3. staffing up in New York. Observer, June 6, observer.com/2012/06/ 2. Alba, Davey. 2018. Perry Chen says he wants to revitalize Kickstarter, kickstarter-competitor-indiegogo-raises-15-m-staffing-up-in-new-york/. employees say he's doing the opposite. BuzzFeed, April 17. https:// 26. Taylor, C. 2011. Indiegogo wants to give Kickstarter a run for its www.buzzfeednews.com/article/daveyalba/kickstarter-perry-chen- money. Gigaom.com, August 5, gigaom.com/2011/08/05/indiegogo/. founder-worship-turmoil. 27. See the Wikipedia entry at en. wikipedia.org/wiki/ArtistShare. Third 18 Can the Wilinadia wikimarlin