TIME Web

Kickstarter Passed Half a Billion Dollars in Pledges in 2014

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Exchanging money digitally PM Images—Getty Images

More than 3.3 million people pledged $529 million total

Kickstarter had its biggest year yet in 2014. The crowdfunding website saw more than 3.3 million people pledge $529 million to various projects over the course of the year, up from 3 million people pledging $480 million in 2013.

Like past years, 2014 brought a slew of highly memorable crowdfunding projects. The Coolest Cooler, a high-tech icebox that plays music in addition to storing drinks, earned $13.2 million in pledges last summer and became the most-funded project in Kickstarter history. In July, Levar Burton’s campaign to resurrect Reading Rainbow generated more than $5 million in pledges and became the first Kickstarter project to gain 100,000 backers.

Other highly successful projects included Neil Young’s high-fidelity digital music player Pono ($6.2 million in pledges), the Micro 3D printer ($3.4 million) and a pair of wireless earbuds that can store music and track your vital signs ($3.4 million).

Since Kickstarter only doles out money if projects reach their initial funding goals, that full $529 million wasn’t paid out to project starters. However, more than 22,000 projects were successfully funded in 2014, the most ever in a single year. Music was the most popular category for campaigns, with about 4,000 projects being successfully funded. However, technology attracted the most pledged dollars, as backers offered up $125 million to fund various gadgets. Here’s a breakdown of how many pledged dollars each category attracted:

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This year Kickstarter also shed some light on when projects are most likely to be funded. Wednesdays are the most popular day for pledging money to projects, while Sundays are the least popular. During a single given day, the most pledges occur around 1 PM, indicating that people may be browsing Kickstarter during work more often than they do at home.

Check out more stats at Kickstarter’s “Year in Review” presentation.

TIME Innovation

Big Idea 2015: Make This the Year You Finally Launch Your Own Startup

small-business-meeting
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Don Tapscott is CEO of The Tapscott Group, and was founder and chairman of the international think tank New Paradigm. Tapscott's new book is "The Digital Economy Anniversary Edition: Rethinking Promise and Peril in the Age of Networked Intelligence".

Consider being a social entrepreneur

2015 will be the time to start a business. Here’s why and how.

Around the world we are facing unprecedented unemployment – even in the developed world. Youth are particularly hard hit. In 2014 more than 1.6 million students graduated from American colleges and universities. Many moved directly into the swollen ranks of the unemployed. After taking on enormous debt to finance their studies, they ended up competing for unpaid internships or low-paying jobs for which their education is irrelevant. This violates the tacit pact made with them: If they were industrious, law-abiding and diligent students, their lives would be prosperous.

The U.S. isn’t alone. According to the International Labor Organization, youth unemployment in most of the world is stuck at about 20 percent. “Young people [are] nearly three times as likely as adults to be unemployed,” says the ILO. In Spain more than 50 percent of young people are unemployed, in Italy it’s 35 percent, and in France the rate is more than 25 percent. When considering under-employment, these numbers could be doubled.

Such unemployment is corrosive to all societies, no matter what their level of development. All citizens want to play a productive role and contribute to their community. Unemployment gnaws at an individual’s well-being, and makes them feel surplus to society’s needs.

But traditional methods of job creation are stalled.

One of the keys to solving this problem is entrepreneurship. Research shows that 80 percent of new jobs come from companies 5 years old or less. So the need for entrepreneurs has never been greater, in both developing and developed countries. When given the right conditions to flourish, entrepreneurs are the foundation of growth, prosperity and even innovation. They bring fresh thinking to the marketplace and fuel the creative destruction that makes market economies prosper.

In addition to creating jobs, new companies are the foundation of the economy and the source of much innovation. They also create the new goods and services on which our standard of living is based. The Internet slashes transaction and collaboration costs for almost every institution in an economy. This is leading to a change in how societies orchestrate capability to innovate, create goods, services and public value. With such costs falling precipitously, companies can increasingly source ideas, innovations and uniquely qualified minds from a vast global pool of talent.

Many big companies benefit from startup entrepreneurship. They acquire small companies with great innovations rather than relying solely on their research and development departments. As the new saying goes, M&A is the new R&D. Entrepreneurship is also critical to social cohesion and avoiding the radicalization of youth and their recruitment to anti-social and dangerous causes.

Waiting for governments or big companies to solve the problem is not the answer. Necessity is the mother of invention. Is it time to take the bull by the horns and make your own job?

The best thing I ever did in my professional life was to become an entrepreneur. It was tough, but it worked out well for me and I have a life of influence, prosperity and fun beyond anything I ever dreamed. Here’s my advice to you.

  1. Create a business with customers. This may sound silly but so many startups are focused on getting traffic to their site, going viral or getting traffic to their website. Peter Drucker said years ago: “The purpose of any business should be to create a customer.” Create some value that a customer would want to pay you for. As for funding listen to Tony Hsieh the CEO of Zappos, who said: “Chase the vision, not the money; the money will end up following you.”
  2. Don’t seek venture capital. These days virtually no venture capitalist invest in a business plans or even early-stage companies. Besides, you don’t need them. Fortunately, it is less costly than ever to create a company. Thanks to the Internet, little companies can now have all the capabilities of big companies, without the main liabilities: stifling bureaucracy, legacy culture and processes. Talent can be outside enterprise boundaries and companies can use the new media to market and engage stakeholders in radically new, low-cost ways. One study found that readily available resources such as open-source software, cloud computing, and the rise of virtual office infrastructure has driven the cost of launching an Internet venture down from $5 million in 1997 to less than $50,000 in 2008. The best is to have a product or service that generates initial revenue so you don’t have to borrow money or give away equity. Or get a loan or small investment from your family or friends.
  3. Consider crowdfunding. The Internet offers a new solution for companies seeking capital, based on peer-to-peer networks that bring people together to achieve a common goal. New firms can source capital in new ways, and it should be no surprise that a young business builders are harnessing the power of mass collaboration to fund their companies. Individuals and new companies have used crowdfunding to raise billions of dollars in debt and equity during the past five years. In 2012, crowdfunding raised almost US $2.7 billion around the world, an 80 percent increase over the year before. Since 2009, Kickstarter has channeled more than US $815 million to nearly 50,000 projects. The early success of crowdfunding in the developed world shows how much potential this new way of raising capital has for aspiring entrepreneurs in the developing world. No jobs? Take a page from my daughter and her best friend who created Knixwear, a company that makes high-performing underwear for women. (“Women are multi-taskers, their underwear should be too”). Their crowdfunding campaign not only raised capital, it lead to a big deal with one of their most important target retailers. A year later, the company is a rocket.
  4. Consider being a social entrepreneur. With the rise of social entrepreneurship – businesses that seek to create social good – there are vast new opportunities to advance social development, sustainability and justice that supplement the efforts of traditional government and civil society institutions. Governments are increasingly inept at solving societal problems. So increasingly it’s up to us. I’m constantly inspired as I travel around the world by the new generation who want to do well by doing good.
  5. The Internet enables startups to focus on what you do best. Partner to do the rest. Companies such as Amazon are opening up their technology infrastructures to create an open stage where large communities of partners can create value, and in many cases, create new businesses. They set a context for innovation and then invite their customers, partners and other third parties to co-create their products and services.
  6. Don’t give up. From my experience, the conventional wisdom is correct — not banal. “Ninety percent of everything is just showing up.” “Success is 90 percent perspiration and 10 percent inspiration.” Or as Winston Churchill said, “If you’re going through Hell, keep going.”It’s a lot of hard work to build a business. But if you’re like me or the women at Knixwear, it’s worth it.

This Influencer post originally appeared on LinkedIn. Don Tapscott shares his thoughts as part of LinkedIn’s Influencer series, “Big Ideas 2015” in which the brightest minds in business blog on LinkedIn about their predictions on ideas and trends that will shape 2015. LinkedIn Editor Amy Chen provides an overview of the 70+ Influencers that tackled this subject as part of the package. Follow Don Tapscott and insights from other top minds in business on LinkedIn.

TIME Ideas hosts the world's leading voices, providing commentary and expertise on the most compelling events in news, society, and culture. We welcome outside contributions. To submit a piece, email ideas@time.com.

TIME privacy

Julian Assange Is Crowdfunding a Life-Size Statue of Himself Because Of Course He Is

Wikileaks Founder Julian Assange Makes A Statement After Six Months Residing At The Ecuadorian Embassy
Wikileaks founder Julian Assange speaks from the Ecuadorian Embassy on December 20, 2012 in London, England. Peter Macdiarmid—Getty Images

The WikiLeaks founder wants to get his face out of the Ecuadorian embassy

Julian Assange has been stuck in the Ecuadorian Embassy in London for two and a half years, and the WikiLeaks founder apparently has a lot of time on his hands.

Assange is using the whistle-blowing website’s official Twitter account to fuel a funding drive for a life-size bronze public “monument to courage” featuring himself, Chelsea Manning and Edward Snowden, the Independent reports. The Italian sculptor Davide Dormino will stick bronze depictions of the trio on chairs with another empty seat beside them—that’s for the public, who can join the whistleblowers.

Some £100,000 is needed for the project, while just £19,360 has been raised on Kickstarter so far. The Kickstarter page says that the the statue “is not a simple homage to individuals, but to courage and to the importance of freedom of speech and information.”

Assange is wanted for questioning in Sweden over sex offense allegations, which he has denied. He fears that if he leaves that embassy, he’ll be extradited to the U.S. after his organization published classified military and diplomatic documents.

[The Independent]

TIME Innovation

Five Best Ideas of the Day: October 28

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

1. Income inequality isn’t beyond our control. Smart policymaking could increase the efficiency of the U.S. economy AND narrow the income gap.

By Jason Furman in the Milken Institute Review

2. A “Paris Club” making and enforcing rules for managing Europe’s economic woes could offer stability for the long term.

By Robert Kahn at the Council on Foreign Relations

3. Fresh, community-based food offered at convenience stores and gas stations could change the way people in Detroit eat.

By Chris Hardman in Civil Eats

4. Reader as publisher? How crowdfunding journalism changes the relationship between news outlets and their audiences.

By Catalina Albeanu in Journalism.co.uk

5. Balancing privacy concerns is key to a future where learners are empowered to use data and truly take control of their networks and their futures.

By Catherine M. Casserly in Huffington Post

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

TIME Ideas hosts the world's leading voices, providing commentary and expertise on the most compelling events in news, society, and culture. We welcome outside contributions. To submit a piece, email ideas@time.com.

MONEY the photo bank

I Raised $1,500 On Kickstarter—Then Gave It All Away

It took 31 days for Santa Fe–based photographer Matthew Chase-Daniel to raise $1,500 via Kickstarter. In addition to the money that came through the website, people handed him singles, a lump sum of $150, even a jar of pennies. They thrust cash at him when they saw him around town, at the post office or the market. Then, once Chase-Daniel had amassed all the funds, for 24 days starting in late August, he gave it all away, at a rate of 40 to 50 one-dollar bills a day.

Now, if you happened to read MONEY reporter Jacob Davidson‘s article earlier this week, “Kickstarter Backers Are Investors, and It’s Time They Got Used To It,” you may be tempted to write off the whole thing as another potential Kickstarter scam. How dare someone in the art world solicit donations when he didn’t even appear to need the money—not like, say, the L’ouvre, the Musée d’Orsay (as reported by the New York Times this week) or even the curatorial program for Portland’s Newspace Center for Photography. Heck, he didn’t even keep it! Take a breath. Chase-Daniel did exactly what he promised his backers: “If you give a dollar, I will smile when I hear about it. Then I’ll give the money away.”

The $1,500 that he raised was for an art installation entitled “Dollar Distribution” for the “Economologies” series exhibited in Axle Contemporary, a 1970 aluminum stepvan custom retrofitted as a mobile art gallery. After meeting and surpassing his goal (even after Kickstarter and Amazon Payments took their cuts), Chase-Daniel made a trip downtown:

I went to the bank and withdrew the money, all as 1-dollar bills. I wasn’t clear how much space that would take. I brought a zippered duffel bag into the bank. It turns out 1,500 bills can be quite compact. 1,000 of them were handed to me fresh from the vault, in a nice brick: 10 banded bundles of 100 ones, sealed in a plastic bag, straight from the Federal Reserve in El Paso. That brick has power. Holding it made me a little giddy and giggly.

Then, he took the brick of bills to Axle Contemporary, where he proceeded to use them to carpet the floor of the stepvan. Chase-Daniel put the final touch on the piece by installing a sheet of glass over the back door, after which he drove the gallery-cum-vault around town, parking in random locations to show the pile of money to interested passersby. (By sheer coincidence, the Axle Contemporary stepvan is not so dissimilar to a Brink’s truck—the distinction becoming even less so with its new cargo.)

Following the viewing, the artist dismantled the piece and distributed it around town. He tossed, slipped, hid, tucked, folded, crumpled, rolled, floated, and buried dollar bills in locations around Santa Fe for anyone to find. Sometimes they were “discarded” haphazardly, sometimes they were strategically placed.

Chase-Daniel recounted the impetus for the project—he was driving into town in 2013 when the breeze blew a dollar bill past his windshield. As he continued, a rolling tumbleweed of bills drifted across the road. The knee-jerk reaction of the drivers around him was to brake and swerve:

It doesn’t matter if you are rich or poor, the sight of cash blowing down the road gets attention and provokes reactions and thoughts and reflection of all sorts, positive, negative, joyous, angry, liberated, stressed-out. I decided I wanted to replicate my experience for others, to spark associations and reactions in others by simply leaving some cash around Santa Fe for others to happen upon by chance.

The Kickstarter approach came later. “Since my idea was to distribute the money randomly to a large ‘crowd,’ crowdsourced funding seemed like the logical way to raise the money,” said Chase-Daniel, who made no money from the project nor gave any credit to contributors.

In some ways, Chase-Daniels’ “Dollar Distribution” is similar to Jody Servon’s “I ____ a dollar” installation. Both used money they had been given (for Servon it came from a grant) to create their installations and then disseminate the money again, circulating it to a new group of people. Chase-Daniels makes a further distinction between his project and the illustrious @HiddenCash, this summer’s social media treasure hunt:

From what I understand of @HiddenCash, people are given clues and then search for the cash and are rewarded for their intelligence, problem-solving and determination. ‘Dollar Distribution’ gives money out to anyone, without discrimination. It is found by rich and poor, intelligent or not, with no warning or even knowledge of the project by the vast majority of ‘participants.’

What Matthew Chase-Daniels hopes will result from the project is that people will experience a visceral reaction to the surprise of discovering a dollar bill at some unexpected point in their day, in the same way he did while driving last year. He likens it to “a feeling of joy or luckiness or good fortune” that comes with finding even such a small denomination as a penny on the sidewalk.

Chase-Daniels tried to remain unobserved while distributing the dollars, but he also felt compelled to document some of the placements photographically. Those photos (which he shared on social media) were—for the most part—cropped too tightly to clue anyone in to a specific location, but they did help to spread the word about the project. That led some people to respond by sharing photos of the bills they had found.

While Chase-Daniels didn’t plan out where he would “drop” the dollars, he did happen upon some locations—a Brink’s truck, a one-dollar table at a yard sale, a book on Dada art in the library—that were too perfect to resist. Over time, he began refining the compositions of the photographs as well as the placement of the money. Chase-Daniels is compiling the images and writing about the project in a book that will be out later this year.

Chase-Daniels emphasized that the most important part of the piece was the distribution of the money; the installation and the photos, he said, “are almost incidental.” If, as he noted, “the money IS the project,” then the 1,500 people that happened upon one of the lucky bills each acquired a limited edition intaglio print—valued at exactly one dollar.

This is part of The Photo Bank, a section of Money.com dedicated to conceptually-driven photography. From images that document the broader economy to ones that explore more personal concerns like paying for college, travel, retirement, advancing your career, or even buying groceries, The Photo Bank will showcase a spectrum of the best work being produced by emerging and established artists. Submissions are encouraged and should be sent to Sarina Finkelstein, Online Photo Editor for Money.com:sarina.finkelstein@timeinc.com.

More from The Photo Bank:
FREE MONEY! (If You _ _ _ _ It)
Looking at ‘Rich and Poor,’ 37 Years Later
When the DynaTAC Brick Phone Was Must-Have Technology
Inside the ‘Pay What You Want’ Marketplace

 

MONEY Investing

Kickstarter Backers Are Investors, and It’s Time They Got Used To It

iStock

Many Kickstarter users still don't quite understand what they're getting into, or why the site is predicated on risk.

It’s been a rough September for Kickstarter. After a three-week period during which two major projects—each of which had raised more than $500,000 on the site—failed spectacularly, the crowdfunding platform has begun to look a little less like a harmless way for underdog visionaries to fund their passion projects and a little more like a casino. It hasn’t helped that a handful of Kickstarter scams and con men were exposed in recent months.

Recently, Kickstarter appeared to respond to the bad press by revising its terms of service. The new document does a better job of laying out the responsibilities creators have to their backers. No scamming, do your best, try to make it up to people if you fail, and so on. But that move likely won’t fix the deeper problem: That most of the site’s users believe that their donations entitle them to some kind of tangible reward, be it a smart watch or a bamboo beer koozie. In reality, nothing of the sort is guaranteed. That’s because Kickstarter backers aren’t customers making a purchase. They’re investors. And like all investments, Kickstarter projects have a chance of going bust.

To an extent, the confusion is understandable. Kickstarter calls itself “a new way to fund creative projects,” which sounds a lot more innocuous than “Craigslist for angel investing” — even though the latter may be closer to the truth. Backers generally have limited information about the people they are supporting. And once a project is funded, they’re on their own when it comes to enforcing contracts with a creators — to the extent that such contracts even exist. In the event that a scammer takes everyone’s money and runs, Kickstarter won’t offer a refund or even chip in for legal fees. But at least in those cases there’s a clear basis for taking legal action (fraud); when money is squandered in a more conventional way — through bad business decisions — funders have no recourse at all.

However, before anyone deletes their Kickstarter app or swears off crowdfunding for good, it’s worth pointing out that you may have staked your retirement on a similar system: The stock market. Equity ownership, after all, comes with startlingly few guarantees. If Tim Cook decides tomorrow to spend all of Apple’s capital on a strategic Cheetos reserve, there’s really not much the average investor (without a controlling stake in the company) can do about it other than sell off the stock. Sure, the stock market does have additional important protections: greater transparency; legally empowered and (theoretically) independent boards of directors; dedicated regulators and watchdogs, and more. But in both cases investors take on a large amount of risk.

Does that make Kickstarter a bad deal? Not at all. In fact, the risky nature of Kickstarter is arguably the very thing that makes it worth using. Project creators offer something to backers — even if it’s just early access to their product — as a reward for taking a chance on a risky idea.

But it’s important to remember why the maker of that sweet felt iPhone case is giving you priority treatment: Things could all go south. And if they do, you’re the one who’ll take the hit.

TIME Crowdfunding

This Smart Cooler is Now the Most Successful Kickstarter Project Ever

Coolest Cooler

Ice bucket meets challenge

Experts say wearable technology is the next big thing, but now the people have spoken. And the people don’t want smartwatches — they want a cooler that will make margaritas and charge their phones while blasting the latest Pitbull song.

The Coolest Cooler, which has a built-in blender, waterproof speakers, USB chargers, LED lights and other features, become the most successful Kickstarter campaign ever on Tuesday, the crowdfunding site announced. The project raised $13,285,226 from more than 60,000 backers in 52 days, beating previous record-holder the Pebble smartwatch, which raised more than $10 million in 2012.

The historic Kickstarter campaign marks the second attempt by creator Ryan Grepper to fund the cooler of the future. In 2013, his design failed to meet its $125,000 funding goal in time, so this year, he opted for a more modest $50,000 goal — that ended up raising $2 million in 24 hours.

Alas, the Coolest Cooler won’t be ready for any Labor Day bashes (Grepper is still finalizing the design and choosing a factory), but it is still coming to a pool party near you: backers who donated $165 or more are expected to receive the cooler in February 2015, and the item will likely retail for $299.

MONEY online shopping

WATCH: Kickstarter Raises a Record $11 Million…for a Drink Cooler

The Coolest Cooler comes loaded with USB chargers, a cutting board and a Bluetooth speaker. It'll even cool your food and drinks!

TIME Internet

Kickstarting Equal Pay: Women Out-Raise Men on Crowdfunding Sites

Call it the funding gap instead of the pay gap

It’s an unfortunate but well-known fact that women trail men in most metrics of business success. But a recent study shows there’s one area of enterprise where women are surging ahead: raising money online via crowdfunding.

On Kickstarter, where backers make monetary donations to projects and businesses in exchange for small rewards, about two-thirds of women-led technology projects reach their fundraising goals, compared with a little less than one-third of male tech ventures, according to the July study from the University of Pennsylvania. Overall, the study found that women are 13% more likely to meet their Kickstarter goals, after controlling for factors like project type and amount of money.

Ethan Mollick, an assistant professor at the Wharton business school at Penn who co-wrote the study, told the Wall Street Journal that women’s success on Kickstarter may be precisely because they are so underrepresented in areas like gaming and technology. These female-started ventures get backed by “women who are activists who want to reach out and help other women,” he said.

That was certainly the experience of Joanna Griffiths, who raised $100,000 on Indiegogo, another crowdfunding site, for her women’s underwear line Knix Wear Inc.. The money came largely from women backers. “It’s a female product. It’s a female team,” she told WSJ. “There’s very much a connection there.”

Alicia Robb, a senior fellow at the Ewing Marion Kauffman Foundation, authored another study on crowdfunding that found 40% of Kickstarter ventures funded by women were led by women, compared with only 23% of projects backed by men.

In other words, women are more likely to support other women than men are.

TIME Crowdfunding

More Than 4 Million People Visited the Potato Salad Kickstarter

Scandinavian potato salad from Silver Palate. (Bob Fila/Chic
Scandinavian potato salad from Silver Palate. Chicago Tribune—MCT via Getty Images

Forget Oculus Rift and the Reading Rainbow reboot—a bowl of potato salad was better able to hold the attention of the Internet this summer.

Crowdfunding site Kickstarter today revealed a bevy of stats related to what has become one of its most famous (or infamous) projects, an initiative by a random guy to make his first-ever bowl of potato salad. The project gathered widespread media attention and ultimately attracted 4.1 million visitors to its web page, making it the fourth most-viewed Kickstarter project of all time:

 

tater sald views

 

Unlike many widely-viewed Kickstarter projects, almost everyone who viewed the potato salad project got a hearty laugh and then went about their business. In the end, the project earned just $55,492 from 6,911 backers. Oculus Rift, for comparison, made $2.4 million, and Reading Rainbow racked up $5.4 million, though both attracted fewer visitors than potato salad.

On the other hand, though, a guy made a cool $55,000 just by saying he wanted to make potato salad. This is the great, democratizing force of the Internet.

Unsurprisingly, most of the project backers came from the U.S., with the United Kingdom and Canada being the next-biggest potato salad backers. Among U.S. states, the most backers hailed from Ohio (potato salad connoisseur Zack Brown’s home state), California and New York.

tater salad map

Brown is planning to host a festival called PotatoStock2014 in Columbus, Ohio with live music and, of course, lots off helpings of the tasty side dish. Proceeds will benefit a charity aimed at ending homelessness in Ohio. A portion of his potato salad money will also be used to start a for-profit venture to “spread humor and joy around the world,” he said on his Kickstarter page.

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