Will the pressure on Kickstarter to take more responsibility for its users force it to change or has the crowdfunding company really carved out a new form of transaction that the world just needs to do a better job of wrapping its head around?
Is it really just about artistic people making cool stuff or will Kickstarter’s business model be forced to reconcile with the fact that it has created a new kind of business?
These are questions we’ve been exploring in this space ever since the crowdfunding leader crossed the billion dollar in pledges mark, and it’s one that we’ll keep following. The context is thoroughly laid out in this piece from The Guardian, however, which provides two useful points of outside perspective. First, Britain lived without Kickstarter for a while, as the startup took time to cross the pond. Second, Britain already has a microinvestment startup in place, Seedrs. America is still working out the legalities around microinvesting.
The story quotes Kickstarter CEO Yancey Strickler, arguing that crowdfunding is a new kind of transaction:
“Maybe 99.99% of money that moves,” he says, is one of three modes: “There’s investment, there’s commerce and there’s philanthropy.” And Kickstarter, though it has similarities, isn’t any of them. “It’s similar to commerce, in that there’s an end-product that is being shared. But, unlike commerce, on Kickstarter you are supporting it before it actually exists. It’s similar to investment in that the money is up front. And it’s similar to philanthropy in that a lot of the pledges are motivated by a desire to just, like ‘this seems cool, I would like it to exist. The world would be better if this happened’.
“But if we were full commerce, then there’s no more prospective projects. There’s no more someone trying to create the future. You’re Etsy.”
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