CARDS ON THE TABLE

Kickstarter’s CEO says we need to overhaul the way we do business

This post has been corrected.

I’m listening to Yancey Strickler, founder and CEO of the crowdfunding platform Kickstarter, with a growing sense of wonder. He looks understated: smiling, wearing spectacles, fitting right in to the hipster haven that is the Ace Hotel in Shoreditch, east London. But I’ve never heard someone in the world of start-ups talk like this before.

Kickstarter, founded by Strickler, designer Charles Adler and artist Perry Chen in 2009, has become a household name. More than $2 billion has been raised through its campaigns. Yet the founders have promised they’ll never take their start-up public or go for a “lottery ticket” sale that would make them millionaires.

There’s “a dire need” for organizational models—in business as in other fields—that aren’t driven by the bottom line, Strickler explains to me.

Their goal is to help the world become a more diverse and interesting place, and not just by making a pile of money with which to sponsor a few pet projects. This is an unusual attitude, in a sector where success is most often measured in venture capital raised or length of time to first millions, but, as the mission booklet that every new Kickstarter employee receives concludes, “Fuck the monoculture.”

To boldly go…

Kickstarter makes money by taking a 5% cut of successful campaigns, and its revenues haven’t been huge: about $43 million over the first four years, according to Quartz analysis. But not seeking huge profits is in the company’s DNA, says Strickler, who took over as sole CEO at the start of 2014 (Chen remains chairman).

This autumn, Kickstarter took things a step further by reincorporating as a public benefit corporation, a structure which only became available in Delaware three years ago.

Having taken very little venture capital (the lead investor was Union Square Ventures) and being both founder-controlled and profitable, gives Kickstarter the power to take such an unusual step, Strickler says. Making the change did require the support of 90% of stakeholders, including about 25 investors and any employees who had shares, but in the end, everyone backed it.

The move was “us trying to think out loud” about how companies can better engage with society, says Strickler. “And by us becoming a public benefit corporation it legally requires us to put the company’s impact on society on an equal footing with our own sustainability. So, it’s not just that you can’t destroy the world, you actually have to benefit it.”

But isn’t it harder to attract top talent if Kickstarter can’t pay like Uber? Visits to the company’s jobs page are up by 33% since they announced the new structure, he answers.

The road less travelled

Strickler is 36 and recently married, with a baby on the way. He says he lives “far out” near New York’s JFK airport, and can’t afford to buy a house. We have the well-worn discussion of 30-somethings in New York and London about how hard it is to rent, let alone buy, a home. But… wait. This is a man who’s achieved the holy grail for start-ups: a business with brand recognition, increasing cashflow, scaleability. There’s a fortune at his fingertips, right?

“We decided we’re not going to use [our position] to squeeze every dollar out and enrich ourselves personally,” he says. “I had no desire for wealth, and I don’t think that would be a correct way for the business to function.”

Investors can still squeeze returns from Kickstarter, through dividends and profit share, soon to be put in place. They’re “very traditional methods,” Strickler admits, but very different from the sudden bonanzas hoped for by many companies at some future, imagined IPO or sale where “everyone gets rich and then stops caring.”

His goal is to encourage diversity in the ways that people do business. It’s difficult, when you’re trying to get something started, to sell idealism as part of the package, but Strickler hopes that Kickstarter will set an example for other entrepreneurs. Doing the right thing will be easier, he suggests, once others are able to say “‘No, no, I’m going to do the Kickstarter thing.'”

Correction (Nov. 3): An earlier version of this article ommitted the name of Charles Adler as a founder. We’ve also clarified that only employees with shares voted on the reincorporation.

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