The pandemic has been a strange time for Kickstarter. Over the past month, the company laid off nearly 40 percent of its workforce as projects on the platform dropped off, causing a “sharp” decline in revenue. But now, only weeks later, Kickstarter says it reached a massive milestone: $5 billion in pledges after 11 years of existence.
As the world battles COVID-19, the company says backers’ support for projects hasn’t waned, but it is seeing a smaller number of creators putting their ideas out into the world. I chatted with the company’s CEO, Aziz Hasan, about the company’s future, how it could adjust its business model, and the potential future of crowdfunding.
Hasan says he’s committed to the core concept of crowdfunding and the tools Kickstarter has created, but looking ahead, the company needs to be more stable and innovate. He suggests Kickstarter might look to play a bigger role in the entire creative process, not just launching a ready-to-ship product.
“Will we be an only-crowdfunding platform forever?” he asks. “Hard to say, but I don’t think so. But I think there’s so much support that creative work needs to make sure that it’s actually realized, and that’s the sweet spot for us.”
You can read the full interview below:
This interview has been condensed and edited for clarity.
What does this $5 billion milestone mean to you and the platform overall? What are some of the biggest changes to the way in which Kickstarter is used that you’ve seen?
When I think about the $5 billion mark, and that’s over the course of 11 years, that’s led to 180,000 projects that are coming to life. What I think is so incredible, especially in this moment that we’re in, is that people are still coming together to support creative work, no matter how difficult right now is for everybody.
For us, some of the surprising things, but a testament I think to the platform and the community, is the strength when a project launches on the platform — that support is actually still just as strong as it was pre-COVID. That wasn’t something that we anticipated seeing. We thought we would see that everything was going to take a hit, but we’re seeing projects on our platform that are funding at rates that we didn’t anticipate, and it just shows that the model itself has been pretty strong throughout this.
To your point about how things evolved over the last decade, I think where we started, [projects were] a specific medium, like a book project or a theater project or a film project. We’re seeing a lot more of this kind of cross-genre, cross-interest type of project coming onto the platform. One of the big, notable ones last year was called Critical Role, and it was where film and game overlapped. We’re just seeing more and more of this, where you’re seeing ideas that transcend mediums, and then people who are really interested in seeing the concept show up in so many different forms, and so that’s just been really encouraging in this moment, too.
What kinds of projects have been the most popular recently, and are you seeing any changes in what kinds of projects show up during the pandemic?
What we’ve seen is that the games projects, comics and illustration, and the design and tech projects are the ones that we’ve seen a lot of resilience during this time, a lot more people putting their projects out there.
The ones that have been the most challenging are ones that require physical spaces or really massive production. One of the best examples of this is a lot of the local cultural institutions in places that we all love: our local neighborhood music venue, our art gallery, or things like that are really struggling right now because they don’t have a physical place. And what we’ve been thinking about is, “Okay well, how do you take a tool like Kickstarter and how do you support those folks?”
And what’s been really incredible to watch is that with a little bit of flexibility and creativity around how people use the tool, we’re seeing a lot of these cultural institutions be able to share their creativity actually outside of a physical space, and that people can actually, from their homes, see this and engage in some of the things that they would have loved to if they could go to the venue. Some good examples of that are like the Knitting Factory. It’s running a campaign as part of our Lights On project. LPR in Manhattan is another one, and then Saint Vitus, which is a few blocks away from the Kickstarter headquarters.
Kickstarter once had a subscription product called Drip, which no longer exists. I think during the pandemic, many people have begun supporting their favorite institutions and creators through recurring revenue and subscription plans. Looking back, do you wish you still had a subscription tool on the platform, and is it something you’d be interested in revisiting?
The outlook on how you help creators fund their projects, I think, will remain kind of open and broad. It’s hard to know right now what the future holds, but in this moment, in the next few months, there’s a place for project-based rewards, something that we’re recognizing and we’re seeing actually that they’re quite resilient right now. And so our focus right now, and the desire, is to just really make sure that that is a reliable tool.
What we’ve seen historically, natural disasters, recessions, things like that, is that creativity tends to thrive in these moments, and it actually has a big kind of boom back. And where I want us to be is that as the creators and as those projects return, and as more of these ideas become less of maybe a hobby or a part-time thing and actually become a primary vehicle of someone’s expression, that we’re there and we’re ready for them.
What do you mean by you’d be ready for them? Would you have a variety of options for how they could launch a campaign?
Well, I think, yeah. Just with our platform now, and there’s so many tools to be able to help them fund their project better, to make sure that they’re connecting to backers better, that they’re setting up their campaign in a way that actually communicates the value of the work that they’re doing, and that people have a clear sense of what they’re supporting. So I think there’s a multitude of ways of taking the existing format and the tool that we’ve created, and actually just giving it even more potency.
You mentioned that you expect to see a boon to creativity during difficult times, but Kickstarter’s layoffs happened because too few projects were launching. Why do you see that chasm? Why is there potentially more creativity than ever but fewer projects on Kickstarter?
So when I say that, what I’m looking to is kind of a future outlook. I think right now, while things just remain so uncertain and unstable, it’s really difficult for any creator to take the leap, and I think as you’re watching a lot of creators, too, they’re leaning back into some basic practices of things that they’re doing. You see people doing drills around their creative work, like deepening their craft and things like that.
But as people I think feel the effect of quarantine, of the world around them, my thought is that 10 months, 12 months out, we’ll start to see people want to take a little bit more of a leap of faith on their ideas. I don’t think we’re there right now, but I anticipate, and I just remain really optimistic that that’s something that we’re going to see in a year from now, at the very least.
Kickstarter’s revenue is directly tied to the number of successful campaigns that launch on the platform, so has the pandemic made you reconsider your business model? Are you looking for alternative ways to make money?
What this has really showed us is that in order to make sure that we’re a longstanding and reliable platform, we need to be able to manage our business a little bit differently. We’ve been operating on modest income and really thin margins for a while, just as I think any small, independent business might. And what the pandemic really put into focus for us was how resilient to shocks we might be as a business, and that we have to do more to make sure that the platform remains kind of available and nimble.
I do see a lot of opportunity, kind of in the future horizon, for us to explore other ways of helping people bring their projects to life, whether that’s through the funding mechanism, whether that’s helping them shape their idea, and whether that’s helping them come and make it at the end of the day. But right now — and my thought here is like the next six months, the rest of this year — we have to do everything that we can to actually bolster the platform that we have and make sure that that thing is quite resilient before we’re able to be in a position where we’re really taking some bigger risks.
So any new business models wouldn’t launch until 2021 or so?
It’s hard to know exactly right now what that looks like, but I would say that the future opportunity is absolutely there, and I have a desire for us to continue to explore other ways that we can help. But right now, and I think for the foreseeable future, we’ve got to make sure that this platform is really built to last.
What’s the plan to get more creators on the platform right now?
There’s a couple things that really come to mind. One is the development of the tools that we’re working on, and I know that you had a chance to cover some of the ones that we did — the Superlative Spotter, which is something that came out of the system integrity team. There’s a number of these opportunities that help creators match their projects to funding better that the team is starting to embark on.
The second is actually just making sure that we are out there helping the projects that are coming to our platform and showing that that support exists.
And on the other side, when I mentioned Saint Vitus, I think for these projects that may not have had that space to feel that they could fund their work or that they could find a way to be sustainable throughout this, it’s really showcasing those stories and helping to tell those, as well.
How could you help backers find projects that are most interesting to them? Would it be a change to your algorithms?
There’s a couple things actually that we’ve done recently in the last couple months that we’re starting to actually see impact from. One big thing is our prelaunch pages, so the ability for a creator to actually start to generate that community ahead of having launched their project, and that one’s been showing a lot of effectiveness, and just making sure that we’re connecting people to the right projects.
The other thing we spent a lot of time working on over the last year was our recommendation engine. I bring that up because I think there’s two aspects of this that are really important. One is how do you have the platform learn and understand the best way to pair a project with someone’s interest? But the second aspect of that is actually never losing the human curation, and so that’s still an aspect that we hold really dear to how we do our newsletters, recommendations, and curation to make sure that you’re getting the best possible recommendation. It’s a variety of tools like our emails, our homepages, and our section pages, and the updates that the creators provide themselves that really help to connect those.
It sounds like people who’d subscribe to your newsletter or come to your homepage are people who have already backed projects. Are you focusing on keeping people on the platform or finding new backers?
I think you have to have both. I think you could stand your business up only on repeat, but I don’t think that’s our ambition. The more people that can understand the value of creative work, and the value of having these projects be out in the world and the immense contribution that those make to society, the better. And so the opportunity here, I think, is to find the right balance of new backers and repeat backers.
Now looking forward, assuming the pandemic wanes and the world starts to somewhat go back to normal, would you rehire for the roles that you laid off?
With this, what we did — and as I kind of mentioned how we can look at the business and make sure that the platform is long-term and sustainable — what we did in this moment was actually try to set the business off with the structure that it needs to kind of go forward. So I think where we see opportunities, and we see measured growth, and we see a reliable way to build the business, we’ll take those as they present themselves and as they are opportunities, but as a much smaller, much tighter organization right now. My interest is that we really can make as much value and impact as we can with the company as it is.
What teams did you cut and which did you keep for the future of the company? Did you keep customer support representatives, engineers, or how did you prioritize roles?
With the layoff, it was across the board. Every team was affected throughout the company, so it wasn’t necessarily just a bet on a team or two. It was really kind of a holistic look at the the organization and its operation.
For us, I think there’s always a number of aspects. One is our base service that we provide, and that’s the base of technology, and support, and customer service, and all of that that we do. Then when you build on top of that, you’ve got the new features that we could develop and the teams that develop that. You’ve got our outreach teams who are directly engaging with creators one on one, and then you’ve got the team that sort of keeps our system fair and functioning and really build that into the platform.
The way that we’ve shaped the team right now, I don’t really see a major difference in how we’ve scaled back to the areas of importance. All of these areas, I think, remain very critically important, but we will be a company that our roots are in the technology and the tools that we develop, and we’ll want to continue to figure out how do we make impact that’s much larger than the size of our operation.
Much of your business seems to be domestic. I know you relatively recently expanded to other markets, like Japan. Is global expansion something you’d like to continue doing? And do you see any patterns in your global market versus the domestic one?
I wouldn’t say that there’s particular patterns that we’re seeing globally that are so distinct that they present like a very specific opportunity that could be maybe the future or where we really double down. The way that we’ve approached our international strategy and our global strategy, historically, is the interest, and the goal is that wherever someone has a project, that this platform is available to them. And how we’ve sort of grown that is where we see the opportunity to open up and make the platform accessible, we’ll take it as a whole host of things that go into how that works technically, how that works from a financial and legal perspective, how that works from an outreach perspective. But we’ll continue to have global as part of our plan and part of our growth, but not a distinct or sole focus.
It’s something that we’re looking at pretty closely and we’re kind of seeing where the opportunity might be and what countries might open up. But we haven’t really made any hard commitments at the moment.
What do you think is the future of crowdfunding, and do you think it’ll still be a valuable model?
I actually think that in probably the next 12 to 18 months, we’re just going to see a lot more funding that is going to be shifted to essential needs. I think that’s just the nature of what’s happening right now.
What I think that means is a lot of private funding. A lot of public funding is actually going to shift that way, which means that many artists and creators and people with projects are going to need additional ways to fund their work. So I see crowdfunding still being a really important tool going forward, and I think that’s going to continue to be a really viable and really important tool for all this creative work.
I really just think that it’s presented itself as a way to remain independent: even as what’s happening around us, you could find your community, you can find the people that want to support you, and that you could actually continue to move that work forward.
Is the future of Kickstarter solely crowdfunding or more like crowdfunding augmented with different revenue streams?
Crowdfunding is a good thing that we do today, and I think that that’s one aspect to your point. There are so many parts of a journey of a creative project that often people don’t focus on. It’s hard to make businesses that really try to create that type of value for fuzzy ideas rather than very clear projects that are ready to be sold. So we’ll continue to look at that space and try to figure out what kind of tools and resources can we create that kind of follow the arc of that creator journey.
So will we be an only-crowdfunding platform forever? Hard to say, but I don’t think so. But I think there’s so much support that creative work needs to make sure that it’s actually realized, and that’s the sweet spot for us. That’s the place where we want to be continuing to create value and make new tools. I think that could go beyond funding, and that can go to many other aspects.
Great, and was there anything else you wanted to add before we end our chat?
My interest and my focus here is I want creators to take the shot. I think that it’s really hard to know if your work matters right now, but we’re seeing it. We’re seeing it all over social media, where people are sharing how they’re feeling, they’re sharing ideas. They’re sharing all this stuff. And I think for the first time, maybe in a very long time, we’re all in a position right now where we feel it in our gut.
You’re sitting here at home, and you know what it feels like to experience a piece of creative work. And that actually is so powerful and so potent because we’re used to having to judge it against economics, against other measures that aren’t intrinsically that human connection. And so the importance of people taking that shot because the work is so important right now for everyone, and knowing that just the support and the funding is there and that it’s strong and that people want to see them succeed, that’s the most important thing in my eyes.
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