1. What makes Kickstarter entrepreneurial, and how is this strategy working for them?

2. What is it about the initial strategic analysis process that helps a firm identify a business opportunity? How might the external environment affect Kickstarter’s entrepreneurial strategy? What are the strategic leadership challenges when the industry is still under development?

Kickstarter had become a popular middleman between the entrepreneur and the capital needed to turn an idea into a reality. The platform had been one of the first to introduce the concept of crowd funding – raising capital from the general public in small denominations to fund creative endeavors – but more entrepreneur-friendly forums were popping up, eager to assist in fulfilling the desires of individuals looking to start something of their own. In a social-media-filled world you could now count on your peers far and wide to help you fund your big idea.

Since its inception Kickstarter had trouble pleasing both project creators and backers alike: procedures had to be refined, rules and policies established, and all parties needed better communication in order to clear up misunderstandings. Kickstarter’s founders appeared to focus more on the creative process than on the financial outcome, believing that “a big part of the value backers enjoy throughout the Kickstarter experience” was to get “a closer look at the creative process as the project comes to life.”

Although Kickstarter only received compensation once the project was successfully funded, it still pocketed 5 percent of the total funds raised, regardless of the eventual outcome. Kickstarter was paid whether or not the project actually created its final product, and returned actual value to the backer. Kickstarter provided no guarantees that funded projects would actually produce promised items or deliver on the project’s goals.

Kickstarter’s founders continued to try to explain to backers that they had no control over the donated funds once those funds were in the hands of the project creator/developer, and therefore couldn’t issue refunds. Kickstarter continued to emphasize that the value was in participating, backing the process, not in receiving actual goods or services. Kickstarter’s founders believed in “the power and passion of the human spirit,” and explained that they wanted “to become part of things bigger than ourselves.” Although this may have been an attractive vision and mission, was it the foundation of a sustainable business model?

According to one researcher, the crowdfunding industry represented “a potentially disruptive change” in the way business funding was done. Certainly opportunities existed. Kickstarter had originally established itself as a fee-for-service commercial venture, but had recently reincorporated as a Public Benefit Corporation, announcing that it would now donate 5 percent of its after tax profits to promote the arts, music and education. Would this allow Kickstarter to overcome the criticisms and maintain its reputation and future business stream?