From Mixtapes to Marxism: Kickstarter’s Journey to Creative Entrepreneurial Freedom
Kickstarter CEO, Yancey Strickler, recently spoke at NEW INC to share tales of his expeditions through “Startup Hell” and the recent news of reincorporating his company as a Public Benefit Corporation.
Public Benefit corps are a novel, and therefore somewhat controversial concept to the VC world, which relies on hard data to mitigate the risks of investing in traditional organizations that emerge within industries. But as the next generation of entrepreneurs experiment with hybrid models of business that are equally informed by social values as they are by profit margins, perhaps they will change the course of how we approach “business-as-usual.”
Here are five key takeaways from Yancey’s heartfelt talk:
Kickstarter’s journey began with a serendipitous encounter between Yancey, who was a music critic at the time, and Perry Chen, an artist who was moonlighting as a restaurant server. They wanted to create a local economy for artists and entrepreneurs in the digital era to leverage their relationships to communities, but were faced with the challenge of building support for the idea’s scalability. The initial backing for their company came from friends and family, rather than investors. Yancey recounted the story of one friend who invested $10,000 in Kickstarter just after having a baby, despite that amount probably being all the money he had in the bank. These acts of faith from their community instilled a deep sense of responsibility to honor their commitment to the vision.
Learn from Unexpected Sources
Both Yancey and Perry have somewhat unconventional backgrounds for CEOs, and are playing an important role in redefining perceptions of what a successful career looks like. In fact, these “out-of-the-box” perspectives helped them stand out among the competition. When wooing Fred Wilson, who would play a key role in investing in Kickstarter’s early stages, Yancey tapped into his musical expertise to make a mixtape for him. Members of the audience asked Yancey how he gained the business acumen to courageously navigate the challenges of the landscape. He referred to his experiences of working for a lot of “shitty companies” as lessons for dealing with the reality of building a business. Yancey also credited Perry’s cautious personality as a productive counterbalance to his own idealism, which creates a team dynamic with a knack for making bold, but strategic decisions.
Know What Matters Most To You (And Stand By It)
In 2012, Kickstarter hit a milestone: a series of crowdfunded projects that surpassed the multi-million-dollar mark. Their success made them notorious enough to be satired on Portlandia, which in a sense was an initiation into mainstream culture.
But the mainstream was not what felt right to Yancey and Perry. Amidst pressure to capitalize on the sudden growth, they decided to set community submission guidelines which emphasized authentic community-supported ideas over projects that could be monetized via advertising campaigns. They declared that “Kickstarter was not a store” and reaffirmed their mission to “help bring creative projects to life”, a move that was initially unpopular among their users, according to Yancey but effective in building a sustainable community that would support their values in the long-run.
Don’t Be Someone Else’s Bitch
Gathering inspiration and courage from books like Not For Bread Alone and Founders at Work, Yancey and Perry began drafting a charter for their company, which clearly defined the values behind their mission. In September 2015, Kickstarter officially joined the ranks of about one-thousand companies called Public Benefit Corporations. This bold move incorporates their ideals of creative autonomy and moral integrity into the company’s business model. Shareholders must agree that the values established in Kickstarter’s charter will not be compromised by pressures to increase profits. Kickstarter goes above and beyond by providing transparent annual reports on social and environmental metrics to shareholders, and implementing unconventional organizational policies that allow them to pioneer new ways of managing employees and create charitable initiatives from their after-tax profits.
“You can be Marxist and run a company in America!”
Yancey’s talk inspired us to think about what the Public Benefit Corporation model means for creative entrepreneurs outside the social enterprise realm. What other types of new visions can be made possible by empowering individuals to do business outside the traditional – and perhaps obsolete – metrics of success? Can this new approach to entrepreneurship create scalability and revenue around the arts, community service, and other pursuits that we might generally dismiss as hobbies and pastimes? How will these experiments in business challenge our culture and public dialogue? Future will tell.
Guest post written by Roo Zine
Roo is a community builder in NYC working with creative tech start-ups and forward thinking real-estate companies. She has a passion for music, exploration, and creating open space for adult learning.
Featured image: Gus Van Sant in Portlandia