因克里斯·迪克森（左）很早就支持Kickstarter，再加上在联系紧密的纽约科技界中两人地位突出，迪克森和陈彬睿很早就结下不解之缘。 图片来源：PHOTO ILLUSTRATION BY FORTUNE; ORIGINAL PHOTOS: BLOCKS: BRANDON LAUFENBERG—GETTY IMAGES; LOGO: COURTESY OF KICKSTARTER; DIXON: KIMBERLY WHITE—GETTY IMAGES FOR TECHCRUNCH; CHEN: TAYLOR HILL—FILMMAGIC/GETTY IMAGES; SKYLINE: GARY HERSHORN—GETTY IMAGES
In early December 2021, employees of Kickstarter, a crowdfunding startup, suddenly heard about a windfall: an investment institution wanted to buy shares in the company. The news came as a surprise. Over the years, employees have saved a lot of shares in the company, but many have long given up the idea of selling.
Kickstarter was a far cry from the startups that exploded in 2009, when the company launched hits like "Solitaire Against Humanity" and spin bike Peloton. For a while, Kickstarter became popular with entrepreneurs and the general public, and even had the most enviable entrepreneurial achievement: the company name became a proper noun, and people used Kickstarter to refer to Internet crowdfunding campaigns.
In its early days, the company's anti-corporate leaning and grassroots ethos attracted a number of celebrities and helped shape the New York tech landscape. From movie premieres to rooftop music festivals and fundraisers that go viral, the company's campaigns prove that creative business ideas can be successful and funded outside of Silicon Valley, and artists can turn to fans for support.
However, more than a decade after Kickstarter's founding, the glory has long since passed, and the CEO has also rotated. Kickstarter 2021 is almost worthless to potential investors, except for a headache. The company's growth has stagnated, and every time a project on the platform reaches the funding threshold, it takes commissions from it, and after the fierce union movement, the culture that once felt good has gradually turned sour. The new shareholders are taking over brands that many consider to be obsolete.
For Kickstarter's employees and early investors, this unexpected investment was like an opportunity to get back on track. After all, the investment amount is a staggering $100 million (the company is valued at about $400 million). Of course, there are pitfalls. At the same time as the investment, Kickstarter is turning to the blockchain, as the new investor is Andreessen Horowitz's crypto fund, which is mainly looking to capitalize on the new hype cycle.
The windfall would have helped the company get back on track. However, after switching to blockchain, the creators and fan base that the company relied on reacted violently, not only losing major projects, but also taking a hit to its reputation that had not yet been restored. The turmoil has shown that even the most promising startups can lose their way, highlighting the challenges of pursuing good on venture capital.
Trouble in Paradise
When Kickstarter was founded in 2009, it led to startups like Etsy or Foursquare in New York. Compared to Bay Area companies like Google and Facebook, which focus on technology development, New York startups are more focused on arts and culture.
The idea for a Kickstarter, in which an artist or creator raises money from the public for a new album, board game or comic book, was first conceived by former DJ Perry Chen, who started the company after struggling to raise money for a concert during the New Orleans Jazz Festival. Among the most well-known VC backers included Fred Wilson, who invested in early Tumblr and Twitter, and his Union Square Ventures may be the most iconic venture capital firm in New York.
Originally, Kickstarter was located in an attic with a tin ceiling on Manhattan's Lower East Side, with graffiti on the front door and a sticker that read "Eat." The company regularly organizes users to participate in events, and in 2010 the first film festival was held on the roof of the old American cannefactory in Govanus, Brooklyn. Videos of the platform's funded projects were shown on the screen, including dances mimicking endangered species of flora and fauna, guests lined up to buy pies and handmade soda from the crowdfunded food project, and a Kickstarter-funded brass band played on the sidelines.
Early employees remember that the company placed a strong emphasis on creativity and social awareness, unlike Silicon Valley startups that pursue growth at all costs. Unlike other peers who have gone through the red for breakthrough growth, the Brooklyn-based startup turned a profit the following year, largely by taking a 5% commission and handling fee from successfully funded projects.
There have been buzzes and breakthroughs in this model, including the BBC comedy London Life, which later won an Emmy Award and starred Phoebe Waller-Bridge, and the VR head-mounted display Oculus Rift, which Facebook acquired for $2 billion. In 2013, "Veronica Mars" producer Rob Thomas raised $5.7 million on Kickstarter after the niche TV series was canceled by Hulu. This is the largest amount of money in a Kickstarter project and a testament to the mission of returning authority to creators.
"Art for art's sake is very important," a former employee told Fortune. "Whether a project can be executed in the end should not only depend on how much profit the project can bring to investors. ”
Kickstarter made it clear early on that it wasn't looking to get rich, and investors poured in a lot of money, including a $10 million funding round in 2011. Early backers included Kickstarter's peers in the creative industry, such as Meetup co-founder Scott Heverman and Vimeo co-founder Zach Klein, as well as Arrested Development actor David Cross. Chris Dixon, who was in charge of Andreessen's a16z crypto, also chose to join when he was just starting out in angel investing.
It seems clear to everyone that the goal of Kickstarter is not to make huge payoffs. In a 2013 blog post, Wilson specifically noted that Kickstarter doesn't need the help of VC (although VC does contribute): "The company doesn't need outside funding, and it doesn't do much to strengthen profitability," Wilson wrote. " Another early investor told Fortune that he chose to invest only because he "liked the company's philosophy" and didn't believe it would bring financial returns.
However, the feel-good early days of Kickstarter quickly turned into another mood – a sense of ubiquitous chaos. In 2014, Kickstarter co-founder Jancyy Schuckler succeeded Chen, who continued to serve in management roles for the next few years, and the CEO rotation began.
In 2015, Kickstarter took the unusual step of transforming into a public good, a for-profit company that agreed to meet social and environmental standards. One employee said in a podcast that a public benefit corporation is a legal structure that can ensure that investors or directors can't exit or sell Kickstarter. "Transforming into a public benefit company blurs the lines between personal and company values," one employee said in a podcast. "Founders often say that under the structure of a public welfare company, the company's pursuit can go beyond profit. ”
This message was reinforced in 2017 when Chen returned to the role of CEO, reiterating that Kickstarter would never go public or be acquired. The company's posturing and abrupt change in business focus began to anger employees. "I do feel extremely tired and burnout, and I don't think the employees have much confidence in Chen," one employee said.
Despite Kickstarter's early profitability, it seems that the business will never take off. In 2016, the number of projects stabilized at around 19,000 per year, with no signs of growth. The amount of crowdfunding on the platform on which Kickstarter receives commissions fluctuates year-over-year, peaking at nearly $814 million during the pandemic.
过去十年,Kickstarter平台众筹的项目停滞不前,资料来源:Kickstarter
One early investor told Fortune that Kickstarter never found a balance between pursuing growth and sticking to obligations that were valuable to society but were expensive or difficult. Despite the noble mission, it can be difficult for employees to find a career path or take initiative due to the confusion caused by competing company development priorities.
In 2012, Kickstarter paid $7.5 million to buy a Pencil Company building in the trendy Greenpoint neighborhood of Brooklyn, which quickly became a replica of the offices of a tech company in the mid-2010s. There is an essential roof garden, solarium and cinema. Late on Saturday nights, employees can also find people playing in the office when they bring their friends. The flip side of the laid-back atmosphere is the uninhibited work culture, where projects stall and some employees work only a few hours a day.
At the same time, the company is still struggling with its growth strategy. Faced with competition from the fast-growing crowdfunding platform Patreon, Kickstarter's acquisition of a startup called Drip in 2016 didn't make a splash, and Kickstarter's plans to deal with rising competitors were put on hold.
"It's not easy to find a business that doesn't conflict with the company's mission," one investor said. "There were a couple of years when it really felt like the company was stagnating. ”
Discontent began to emerge among employees, with many joining the company because they loved its mission, which some called "dreamy, somewhat sublime atmosphere." They knew then that because Mr. Chen had promised never to sell the company, his stake would not be worth much.
In March 2019, tensions in Kickstarter's corporate culture finally flare-up, in the form of a union movement. At the time, unions were still new to full-time employees at tech companies. Aziz Hassan, the new chief executive who succeeded Mr. Chen, responded that the company would not voluntarily recognize the union. Kickstarter fired two employees who led the union movement. The two turned around and accused the company of unlawful retaliation.
Kickstarter's blunders in dealing with the union movement shattered the illusion that the startup was nothing out of the ordinary. The incident drew condemnation from the creators who once made Kickstarter famous, including actor David Cross, who took to Twitter to call on fans to support the union. Institutions such as Current Affairs magazine, which have supported progressive projects through the platform, have threatened to withdraw their funding. The company later recognized the union, but soon laid off 18 percent of its 140 employees, and Hassan said there was a reduction in new projects on the platform.
In early 2020, the pandemic caused Kickstarter's employees to leave Greenpoint's headquarters to work remotely. During this period, the platform experienced a brief increase as people stuck at home tried to find ways to support creators. At the same time, venture capital has poured into other startups, both in terms of amount and valuation. Cryptocurrency prices soared to all-time highs, with Bitcoin reaching $69,000 in November 2021. Just a month later, Kickstarter's blockchain announcement and $100 million takeover offer were made public.
Take a big gamble on blockchain
It's no surprise that ICKStater has caught the attention of emerging venture capitalist Chris Dixon. In the early 2010s, Dixon, who ran a referral startup called Hunch, often blogged about a return to the more egalitarian Internet era, which has a large readership. As Dixon wrote in 2009, he and his peers at Founder Collective, a small venture fund founded by New York-based tech founders, backed a company called 20×200, which "democratizes the arts" by sharing revenue with artists and is determined to "not please New York's Upper East Side socialites."
In 2011, both Dixon and Hunch co-founder Katerina Fark invested in Kickstarter, which also propelled the company to become a darling of the New York tech scene. Soon after, Dixon joined Andreessen Horowitz and developed a keen interest in blockchain, which he believed could bring the Internet back to its original open source. In 2018, Andreessen Horowitz launched a separate a16z crypto business specializing in blockchain.
During his tenure as head of A16Z Crypto, Dixon's third fund raised a huge $2.2 billion and his connection with Chen Binrui has not been interrupted. According to a person familiar with the matter, in the summer of 2021, Chen Binrui and other members of the Kickstarter board of directors contacted Dixon to discuss a new round of Kickstarter investment, and also proposed to use blockchain as a fulcrum to promote the transaction. For Dixon, it was too tempting to lead a well-known company like Kickstarter into the promising Web3 space, and he had no reason to turn it down.
Rather than injecting new equity into Kickstarter, the deal is in the form of a tender offer, meaning that the new cash will be used to purchase outstanding shares held by other shareholders and will not flow directly into Kickstarter. This means that employees and early-stage investors can cash out.
According to people familiar with the matter, the total amount of the stealth financing round is $100 million. a16z crypto led the round, and a number of other smaller investors joined in, including Yes VC, who led the early-stage project, and the head of the company was Fack, a former co-founder of Dixon, who also co-founded the photo site Flickr.
While this is a huge investment for a company with a small income, it is not special for A16Z Crypto. Dixon has made other bold bets to realize his vision of a cryptocurrency-based network, such as co-leading two deals totaling more than $160 million in 2018 with Dfinity, a startup that is building a blockchain-based internet. (However, the company's token plummeted 95% shortly after its launch and was ensued by controversy.) ）
In return for 16z's generous investment, Kickstarter tried to transform into a Web3 company. The plan calls for the entire platform to be transferred to a blockchain called Celo, also a 16z investment company, and the execution is grand and arduous. The platform will operate as an open-source protocol (similar to HTTP or Bitcoin) and will not use a proprietary code model like most tech companies.
Users will be able to create their own mini-platforms around niche interests such as anime, allowing them to attract more people and share the profits through Kickstarter. The architecture, similar to projects such as Farcaster, does not require donors to pay in cryptocurrency, and Kickstarter launches new open-source versions of existing software on the blockchain, which has never been tested for large-scale consumer applications.
Few in the crypto industry consider Celo to be a top-tier blockchain project, but the project does have a "carbon negative" footprint, which allows Kickstarter to live up to its environmental mission statement. In August 2022, Celo co-founder Sepanda David Kamwa joined Kickstarter's board of directors.
The deal doesn't call for a Kickstarter turnaround. Despite this, a Kickstarter employee said that the company's internal communication made it clear that a16z was involved, and that the venture capital giant invested in Kickstarter because the company was willing to enter Web3. That said, Kickstarter is the perfect experiment.
On December 8, 2021, the same day Kickstarter announced its foray into blockchain, an offer was received in employee inboxes. They can sell up to 32.49% of their shares for $7.41, a significant increase over the employee buying price, and have the option to sell more if others don't participate. Kickstarter will even pay for it. "[The company's] enthusiasm seems to be very high," said one former employee.
For some employees, the acquisition was an unexpected gift after years of turmoil. "This is a once-in-a-lifetime opportunity," one employee recalls his thoughts after receiving the offer.
Taylor Moore, one of the dismissed union organizers, was deeply upset by the news.
"Kickstarter's leadership, including Chen and a few other sycophants, is the quintessential 'emperor's new clothes,' completely out of touch with everyone else," he told Fortune. "And people who really work hard...... We all know that this idea is stupid. ”
Chen Binrui is enthusiastic about blockchain, but the announcement has little specifics and a time frame for the transition is less than a year. As a result, the Kickstarter community fears that the scheme will turn the platform into a get-rich-quick scam amid the hype in the cryptocurrency market. Some users are concerned about the environmental impact of transitioning to blockchain, which could have a huge carbon footprint, despite Kickstarter's choice of Celo for climate protection. At a time when Sam Bankman-Fried's FTX is still months away from collapsing, the cryptocurrency industry scandals are alarming.
"You've seen it...... The cryptocurrency space is almost everywhere with rampant fraud, theft, and financial collapse," Isaac Childis, founder of a popular tabletop game company, wrote in a June 2022 newsletter. He announced that he would choose other platforms for crowdfunding projects in the future.
The outrage in the community was the employees, who expressed skepticism in group chats and exchanged jokes mocking Kickstarter NFTs. As the company decided to find an external advisor to announce the transition to blockchain, many employees were unprepared for the sudden influx of user abuse. Coupled with Kickstarter's tried-and-failed history of launching new projects, there are doubts about its ability to achieve a major technological transformation. "It's unimaginable," one employee said.
The plan to move to blockchain seems to be bleak, and it is fast proven. Within a few months, executives stopped talking about it, and the platform was not adjusted to run on the blockchain at all. "It feels like Drip," said one former employee, an ill-fated competitor to crowdfunding site Patreon. "Announce it, then give up. ”
In 2022, Kickstarter hired another CEO, Everett Taylor, for the fifth time in a decade that the company has changed heads. He took over after the union movement and the transition to blockchain, when the company had laid off about 40% of its workforce. A Kickstarter spokesperson said that Chen Binrui quietly resigned as chairman of the board of directors and began a transition plan to leave the board altogether last year.
Taylor quickly made it clear that blockchain was no longer a focus for the company, telling TechCrunch on October 4, 2022, a week after taking office, "We promise that Kickstarter will not transform blockchain or engage in blockchain-related businesses." ”
Dixon and a16z Crypto declined to comment for this article, but Dixon made it clear at the press conference for his new book, Read Write Own, that blockchain is a long-term trend, despite the public's apparent dislike of blockchain technology. Kickstarter isn't completely giving up either. After announcing its transformation in 2021, the company spun off an independent charity called Creative Crowdfunding Protocol, deploying two employees, including Kickstarter's former operations manager. Now that the new company website has posted two software engineer recruitment requests in Bangladesh, Celo still refers to Kickstarter as an "ecosystem partner."
The shift didn't affect Kickstarter, and a16z's funding was undoubtedly good for gaining goodwill with employees and investors. But employees say it's another factor that makes it difficult for companies to get out of the doldrums. The collapse of the blockchain transformation has finally sent chills down the hearts of users and employees, and there is a widespread belief that Kickstarter is over.
In late 2022, Kickstarter's COO Sean Leo insisted in an interview with Celo that the company still believes in blockchain. When asked by an interviewer how close Leo is to realizing his vision, he replied, "It's still 95 percent away." ”
Kickstarter declined to allow Leo, Taylor, and other executives to be interviewed.
Still looking
Kickstarter has indeed earned a rare accolade for startups, becoming a proper noun, but the light is long gone. "Whenever I say this kickstarter work, the first thing people think is, 'Oh, that company is still there?'" said a former employee who joined the company in 2022.
Today, Everett Taylor continues to look for new sources of income, launching initiatives to help creators with shipping, logistics, taxes, and more. He has also given magazine interviews and appeared at forums in an effort to reintroduce Kickstarter to the public, emphasizing his role as a Black CEO and the company's commitment to executive diversity.
A year after Taylor's joining, Kickstarter hired a new CFO to help boost revenue. According to company data and an internal email sent by the CFO, revenue has declined since 2019, despite an increase in total fundraising. "They're always talking about it," said one former employee. "It feels like every all-hands meeting is an emergency. A spokesperson declined to provide Kickstarter's revenue figures.
In the end, the new product didn't solve the fundamental problem of Kickstarter: the platform has funded roughly the same number of projects each year for the past decade. While the company's internal slogan was "Him Monoculture," Taylor's approach was more corporatic, and five former employees interviewed by Fortune magazine expressed displeasure. In early 2023, Taylor became the face of a Chevrolet advertising campaign, and in February he joined the board of directors of a publicly traded company in the online luxury market.
"A lot of people are angry when they see the CEO doing sponsored content," one of them said. "It feels like a betrayal of the company's values. ”
Rampant fraud on the platform has also been a constant concern. Over the past three years, the Better Business Bureau has received more than 100 complaints related to the company, many of which involve fraud or users never receive supported products. Last year, the Ohio Attorney General announced a settlement for a Kickstarter user who allegedly raised money for a turtle conservation charity and later invested in cryptocurrency.
The scammers agreed to refund the deceived donors and not run a crowdfunding campaign in Ohio for five years.
According to Kickstarter's mechanic, projects can be fully funded even if they don't intend to launch, and Kickstarter can earn commissions from them. Some users also make small pledges on the platform to test whether their credit cards have been stolen. According to Fortune magazine, internal estimates show that fraudulent projects earn as much as 18 percent, and state attorneys general and the Federal Trade Commission have previously taken action against Kickstarter platform fraud in their investigations. (The Kickstarter company has not been charged in a lawsuit or complaint.) A spokesperson disagreed with the estimates, saying the company had taken "a lot of steps" to address fraud, including new detection software and processes.
With prices soaring and cryptocurrencies back in popularity, open-source protocols can still solve Kickstarter's thorny problems. In an interview at the end of 2022, Leo mentioned that the blockchain's immutable bookkeeping and traceable address and transaction history can help solve the platform's difficulties in fraud and trust.
However, the biggest problem with Kickstarter may be that the time has passed. "I feel like on a cultural level, this company has been abandoned," one former employee told Fortune. "Now that there are more convenient ways to [raise money], like being a TikTok influencer, what's the reason to go to Kickstarter?"
Still, if an independent creator wants to make a board game with lengthy descriptions, or a clock that uses artificial intelligence to write a new poem every minute, Kickstarter fills the gap.
"Since its launch in 2009, $8 billion has been pledged for creative projects on Kickstarter," a company spokesperson said in a statement. "Going forward, we will continue to do everything with the community at the center. ”
The spokesperson said that in the creator economy, companies are not in the same position as platforms such as TikTok. They mentioned recent projects funded by social media influencers, as well as Kickstarter-funded films screened at Sundance.
However, in the wake of the blockchain scandal, competitors such as BackerKit have attracted some disgruntled users, and top creators have continued to churn. In February, fantasy writer Brandon Sanderson announced that BackerKit would be chosen for his next project. Sanderson has launched the largest campaign in Kickstarter history.
At the end of the day, Kickstarter never reinvented the rules of investing and community support, stumbling over its own idealism every time it tried to leap to the next level.
"The company aspires to make the platform more marketplace and re-emerge as a household name," said one employee who recently left the company. "I feel like the company's reputation is deteriorating and its growth is stagnant. ”
After the pandemic, the company never moved back to its 33,000-square-foot Greenpoint headquarters, instead selling the property for $29.5 million. After months of searching, Kickstarter is in talks with a potential buyer for a talent agency that serves social media influencers. (Fortune Chinese Network)
作者：LEO SCHWARTZ AND JESSICA MATHEWS
Translator: Liang Yu
Reviewer: Xia Lin
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