Kickstarter by the numbers
On October 25th, the Walker Art Center held a lecture/discussion with Yancey Strickler, one of three co-founders of Kickstarter.com. The presentation hall was pretty packed and the event was streamed online. And even better, the entire discussion is online, so kudos to the Walker for making it accessible. I was there mostly to learn and show a bit of support for a friend’s pottery studio (Frostbeard Studios), which went from local sales in coffee shops to shipping internationally thanks to a successful Kickstarter project.* Though from the questions from the audience, it seemed to be equally an event for those preparing to launch their own Kickstarter projects.
The presentation by Strickler had a ton of numbers and examples, but the numbers were what I latched onto. Luckily for the less nerdy, it was also easy to pull out thoughts and ideas one might apply to a future Kickstarter attempt. But I started focusing more on the stats. And thankfully, someone at Kickstarter loves numbers too, because it turns out they run a live stats page.
With a quick glance, as of November 11th;
- 77,102 projects have been launched
- $410,000,000 pledged of which $350,000,000 went to successful projects (the remaining $60,000,000 of pledges being unprocessed since only projects that meet their goal get their pledges)
- Projects have a 43.8% success rate currently
Of course, it should be noted that Kickstarter, while easily one of the more recognized names in “crowd funding”, is only a piece of the pie. In 2011, around $1.5 billion was raised through 452 crowd-source funding style sites (source: crowdsourcing.org). That puts Kickstarter’s market share at around 6% for that year.
One thing I was curious about was Kickstarter’s success. It’s completely privately held, which is good (at least presently, as the level of transparency is admirable and the idealism of the founders appears to be the chief driver). Let’s assume the numbers above can be used to extrapolate pledged dollars into dollars that actually go to successful projects. From that we take their data for the past couple of years and determine the following:
- In 2010, $27,638,318 were pledged… so approximately $23,594,000 went to the 3,910 projects that met their goal.
- In 2011, $99,344,382 were pledged… so approximately $84,806,000 went to the 11,836 projects that met their goal.
- Which leaves around $241,600,000 that went to about 18,000 projects in either 2012 so far or from their launch in 2009 to the end of that year. Extrapolating with the 2010 and 2011 data (and other assorted data available from news stories and blog posts), we can reasonably break this down as
- In 2009, approximately $2,500,000 went to 500 projects
- For 2012, Kickstarter could see approximately $250,000,000 go to 32,500 projects**
For those of us who are visual, this looks like…
Another interesting aspect of this is the question of revenue. It takes a lot to run a dynamic website like Kickstarter. Currently they’re at 46 staff and just bought a warehouse/office building in the Greenpoint neighborhood of Brooklyn, NY. To cover these costs, to make Kickstarter possible, they currently collect 5% of the funds raised by successful projects. I’ll be honest, my initial reaction was “damn, that seems high,” but I have since come around to being more neutral. This fee model is arguably extremely fair. Where else would you find someone willing to be the middle man on raising hundred or thousands or millions of dollars for just a 5% cut. And they only take this cut if you’re successful. If nothing else, it’s pretty easy math to take into account this 5% fee when setting up your project’s funding request.
So based on the number above, what is Kickstarter bringing in? Well, 5% of successly funded projects is:
- $125,000 in 2009
- $1,179,700 in 2010
- $4,240,300 in 2011
- $12,500,000 in 2012
Considering Kickstarter raised $10,000,000 in venture backing to get the company rolling and moving forward, I’d say it’s doing quite well for itself. I mean, if these incredible rates of growth continue (which they really can’t, can they?) Kickstarter will be bringing in $100,000,000 in income nd funding $2 billion for 260,000 projects annually in another 4 years. Considering this is more than the entirety of the current crowd funding industry, it’ll be interesting to see how things change in the near future.
*Kickstarter likes successes (and failures), so all past projects can still be found online (though naturally it’s much easier to find the successes). The one for Frostbeard Studios can be seen here: http://www.kickstarter.com/projects/roxiespeth/mustache-and-monster-mugs
**At the event at the Walker Art Center, the following loose statistical statement was mentioned “…currently it’s on track to channel more than $150 million to thousands of creative projects in 2012…”, which, based on simple arithmetic, is clearly very modest (and already surpassed). I’ll have to make a note to come back to this topic in January and see how my projections stack up (and if I can explain why, if they don’t).