By Aaron Sekhri
When Thomas Pauly ’12 and Rebecca Hecht ’12 needed funding for their senior project, a theatrical production titled “The Ones Left Behind,” they took an unconventional approach to raising the funds. After receiving a generous but insufficient Angel Grant — a $3,000 grant provided by Undergraduate Advising and Research (UAR) to assist students in producing public creative works — the pair created a project on Kickstarter, a popular “crowd-funding” platform that allows individuals to seek funding for creative projects.
Although the company was founded in 2009 by Perry Chen, Yancey Strickler and Charles Adler, the Kickstarter concept had been in Chen’s mind since 2002, when he backed out of hosting a concert at the New Orleans Jazz Fest because of the financial risk. After conversations with the others, a philosophy emerged that the service would target artists and entrepreneurs who do not have traditional access to financing or publicity.
Kickstarter representatives, following current company policy, declined to comment for this article.
The mechanics of the website are simple, defined by two words: “creative” and “project.” Creativity on Kickstarter is less a descriptor and more a prerequisite. The variety of Kickstarter projects is vast, with endeavors ranging from filmmaking to design to manufacturing. The finite quality of a creative project is crucial to Kickstarter’s standards.
“A project is something finite with a clear beginning and end,” reads the Kickstarter website. “Someone can be held accountable to the framework of a project — a project was either completed or it wasn’t — and there are definable expectations that everyone can agree to.”
Each project must have a defined fundraising aim, an allotted time span and rewards for users who pledge money to the project. Projects also must not violate Kickstarter guidelines, such as straying from Kickstarter’s defined categories. As of May 2012, over $175 million has been raised on the website. On May 18, a Palo Alto-based project Pebble, which is developing a smartwatch that wirelessly connects to smartphones to alert the wearer of messages and calls, closed a round of fundraising that exceeded $10,000,000 in backing, despite a goal of only $100,000.
The platform is designed for specific and finite projects, and diminishes risk for both investors and the producers. Unless the total is reached, no money changes hands. If a fundraising total is raised, the group behind the project does not need to commit any of its own money. This presents an ideal situation for those without traditional access to finance or investment capital — particularly students.
Tom Cohlmia M.S. ’13, a student in the Stanford Design Program, took advantage of Kickstarter for his final assignment as part of a Hasso Plattner Institute of Design (d.school) class, StoryViz. His unique sculpture designs, which make use of etched crystal fragments, are part of a project he has been developing since high school. The designs proved a perfect product to market on the website and Cohlmia reached his total in a matter of days, ultimately raising $15,000 — more than four times his goal.
Cohlmia’s project marks an expansion of the types of projects Kickstarter first hosted, projects such as music performances, art pieces and independent films.
“I honestly think that Kickstarter is most compelling for things, tangible things,” Cohlmia said. “Kickstarter forces you to prove your ability to do something, and so when you have a video showing what you can do and you’re just asking for money to make more of the thing, it’s much more compelling.”
Cohlmia went on to challenge the notion that Kickstarter is a democratized platform, where everybody has an equal shot at fundraising, or that good products will achieve their fundraising totals regardless of their marketing and presentation efforts.
“Kickstarter is just a smaller scale of the real world,” Cohlmia said. “Salesmanship, timing, the quality of your video, are all just like if you were selling the product conventionally.” His advice for aspirant “Kickstarters” is to demonstrate “a combination of technical expertise with a compelling story behind the product.”
Rahul Bhagat, head of operations at Pebble, also gave his thoughts on how to establish a quality campaign — salient advice coming from the organizers of the most successful Kickstarter project to date.
“One of the keys we found was to convey use cases through the video,” Bhagat wrote in an email to The Daily. “Sure, the technology is interesting but most people just want to know how the device or service will fit into their day to day lives.”
Interestingly enough, Pebble saw Kickstarter as “a plan B…after having had limited success with the traditional venture capital route.” The fallback route turned out far more successful.
“[The platform] gives you knowledge of how many people are interested in your product, feedback from potential consumers and raises capital without giving away equity,” Bhagat said.
The first of Pebble’s watches will debut in September. Given the success of funding projects involving the development of hardware — projects different from the more traditional artistic projects that Kickstarter initially intended to support — Kickstarter may prove more useful to parties interested in funding hardware development.
“It’s clear that the platform has the potential to support massive hardware and software projects,” Bhagat said. “It is up to the folks at Kickstarter to decide if they want to continue to support these avenues.”