Earl Scioneaux III is not a famous music producer like Quincy Jones. He is a simple audio engineer in New Orleans who mixes live albums of local jazz musicians by day and creates electronic music by night. He had long wanted to pursue his dream of making his own album that married jazz and electronica, but he had no easy way to raise the $4,000 he needed for production.
Then he heard about Kickstarter, a startup company based in Brooklyn, New York, that uses the Web to match aspiring da Vincis and Spielbergs with mini-Medicis who are willing to chip in a few dollars toward their projects. Unlike similar sites that simply solicit donations, patrons on Kickstarter get an insider’s access to the projects they finance, and in most cases, some tangible memento of their contribution. The artists and inventors, meanwhile, are able to gauge in real time the commercial appeal of their ideas before they invest a lot of effort — and cash.
“It’s not an investment, lending or a charity,” said Perry Chen, a co-founder of Kickstarter and a friend of Scioneaux. “It’s something else in the middle: a sustainable marketplace where people exchange goods for services or some other benefit and receive some value.”
Scioneaux, who ultimately raised $4,100, offered a range of rewards to his supporters: For a $15 payment, patrons received an advance copy of the album; for $30, they got a personal music lesson as well. A payment of $50 or more got both of those, and a seat at Scioneaux’s dinner table for a bowl of his homemade gumbo and a chance to listen to some of his studio recordings. “I didn’t expect people to be all over that one,” he said, “but it sold out almost immediately.”
That sense of inclusion is an important part of the appeal to Kickstarter’s supporters, who don’t get a tax deduction for their payments. Scioneaux’s dozen or so dinner guests included Mark Barrilleaux, an engineer from Houston, and his wife, Janet, a retired nurse, who put up a total of $100. “We decided it’d be worth it for the entertainment value and the opportunity to participate in a musical production,” said Barrilleaux. “I’m a petroleum engineer. How else could I join the music business?”
So far, projects on Kickstarter have included building a temporary wedding chapel in Manhattan, converting an old bus into a mobile Thai restaurant, sailing around the world and shooting photographs from all 50 states.
Chen began toying with the concept in 2002 after he reluctantly called off a concert he had been planning to host during the New Orleans JazzFest because the $20,000 investment was too risky for him to shoulder alone. “I realized there was an underlying problem that needed a solution,” he said. “There could be a way to find out if people were willing to commit to an event and even fund it to manage the risk involved.”
The idea simmered until 2005, when Chen befriended Yancey Strickler, who used to head the editorial staff at eMusic, an online retailer, and the two decided to see if the concept would work.
“Money has always been a huge barrier to creativity,” Chen said. “We all have a lot of ideas we’d like to see get off the ground, but unless you have a rich uncle, you aren’t always able to embrace those random ideas.”
After raising about $300,000 in seed financing from family and friends, including the comedian David Cross and the Pitchfork Music publisher Chris Kaskie, Kickstarter introduced its platform in April.
The company doesn’t currently have any profit — all money raised goes to the projects. So far, more than $400,000 has been pledged for almost 400 ideas.
To date, all the projects on the site have been hand-picked by the founders, although they plan to eventually open the site to anyone. Once that happens, they said, they will consider charging a fee to process transactions.
In the world of small-project finance, Kickstarter is pioneering its own niche. It is not a charity site like DonorsChoose.org, which solicits tax-deductible donations for classroom projects. Nor is it a peer-to-peer microlender like Prosper or Lending Club, in which people can post their borrowing needs and individuals finance pieces of it. And it is not an investment firm.
“I see Kickstarter as micropatronage,” said Lewis Winter, a 27-year-old graphic designer from Melbourne, Australia, who has pledged money to five projects. “If I was rich, I’d fund whole projects, but this allows me to fund as much or as little as I can afford.”
Patrick Rooney, director of research at the Center on Philanthropy at Indiana University, said that some online donors, particularly younger ones with less money to contribute, could find Kickstarter’s model more appealing than donating to traditional nonprofit institutions. “It’s very personal in some ways, as opposed to giving a gift to, say, Indiana University,” he said.
Indeed, Emily Grenader, a 24-year-old artist in Houston, directly involved her patrons in her project: mailing postcards every day for an entire year. “I needed the funding but I also needed addresses — people — to make it work,” she said.
Grenader asked for $5 contributions and quickly raised double her original goal of $365. But money is still rolling in from people who want one of her cards. “It works because people want to support the artists, but they also want the things being offered,” she said.