Kickstarter doesn't want to be a venture capitalist

The crowdfunding company likes raising money for artists, rather than seed funding for companies.

Kickstarter's homepage
Kickstarter's homepage

Reuters blogger Felix Salmon shares my fascination with Kickstarter, and has been covering its uneasy transformation from an online begging bowl for artists to, essentially, a shopping site for products which don't exist yet.

Salmon reports from the Wired Business Conference, where Kickstarter co-founder Yancey Strickler spoke to Wired editor Jason Tanz. He writes:

Strickler is clearly much more conflicted about the way that his site’s most high-profile projects — the latest being the ridiculous Pebble watch — are turning the site into some kind of online shopping platform. He came onstage directly after Marc Andreessen, who was talking about how Kickstarter was something of a Plan B for Pebble, after they had failed to raise venture funding. Now that the company has shown that there’s more than $7 million of real demand out there for its project, however, that "derisks the company", says Andreessen, and makes it more likely that they can raise VC funds.

This didn't sit particularly comfortably with Strickler. "Kickstarter is for creative projects," he said. "We prefer creative expression to maximization." More generally, he said that “we don’t allow corporations to use Kickstarter”, and talked of the "danger" that funders will view a project as a commercial transaction — spending money on a thing — as opposed to a funding transaction. "People need to have the right expectations going in," he said.

Kickstarter has real potential to change the landscape of how startups operate, but Salmon is right – it needs to make its mind up about what, exactly, it's for. Right now there are 2 million people using it in a way which is very different to how its founders want it to operate, and if those competing pressures come to a head, things could get ugly.