When Callum Borchers of the Boston Globe spoke to Hyungsoo Kim this week, the entrepreneur was blunt about his company's future. "The Kickstarter is going to be our only hope," he said.
Kim is the founder of the Eone timepiece, the watch that allows blind users to check the time with their hands, which just went on sale for $128 a pop on Thursday. Like many other creative minds at the helm of a big project, Kim turned to Kickstarter to help him fund his endeavors and, in an hour, raised more than $10,000 en route to raking in the $40,000 that he was looking for. This is just one of many success stories.
Since launching Kickstarter in April 2009, co-founders Perry Chen, Yancy Strickler and Charles Adler have helped raise over $700 million for over 100,000 launched projects. The company allows people to make a pitch online regarding their project, set a funding target and a deadline for the target to be met. If the project falls short of meeting their financial goal by the deadline, even by one dollar, it cannot get any of the funding. In return, Kickstarter takes a 5% cut in the money raised.
The model, as the numbers suggest, have landed the three founders a very high profile for their company. Despite being technically categorized as a crowd funding site, Chen, the 36-year old CEO, makes it clear that his company is no place for people looking to make big return on investment.
"We don't want people looking at these projects and thinking, 'is this thing going to make money,'" Chen said to Walter Isaacson. "That bar is really high. We want people looking at these projects to be like, 'I like these people, I like their idea. I want to help make this happen,' and that's where we focus."
As a project creator, raising funds has always brought the risk of giving up equity or too much ownership. With Kickstarter, there is no such reason for entrepreneurs or artists to worry.
But as Venture Beat pointed out, Kickstarter isn't a place for startups to come by the thousands for large-scale investments of cash with no strings attached. Of the over 40,000 successful projects that got funded, only 679 raised over $100,000 and 40 raised over $1 million.
Instead, Kickstarter is a place for creative ingenuity to flourish, a fact that is emphasized by the background of the head men in charge. Chen has a history working with music, Strickler worked in Journalism and Adler worked in fine arts. And much like the typical "artsy" types, the three men are not interested in selling out at all.
“We don't ever want to sell this company, we don't ever want to IPO this company,” Chen is quoted as saying by GigaOM. “As a company, we want to stay small."
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