Kickstarter finally takes control of its story -- and the Pebble Watch ain't in it

By Sarah Lacy , written on January 10, 2013

From The News Desk

Kickstarter is a notoriously press-shy company. The founders, admirably, prefer the attention go to the projects fundraising on the site and wisely want to avoid the downside of the hype cycle by not encouraging said hype in the first place.

But whether Kickstarter welcomed it or not, it was undeniably one of the biggest press stories of last year, playing a central role with two huge trends: The excitement around crowd funding and the resurgence of hardware in Silicon Valley. The problem was, those weren't particularly the accomplishments Kickstarter prided itself on. One is really a finance story and one is really a tech story. And that's not bad. But Kickstarter wants to be an art story first and foremost.

And no, that's not because of the headaches it experienced towards the end of the year with hardware products not shipping and debates about whether donors should get refunds. (A full 84 percent were delayed....ouch.) The truth is the team has never wanted to embrace the mantle of being just an alternative or gateway to raising venture capital. It's simply not why Kickstarter was created.

But in the absence of telling its own story for much of the year, those were the two narratives that the press ran with. Play Kickstarter word association with many of our readers and they'll likely say "Pebble Watch" or "Ouya" -- two of the biggest success stories. The Pebble Watch was the single largest raising $10 million, while Ouya raised $8.6 million. More telling: Both were turned down by nearly every VC in the Valley first. This in an era of everyone getting at least a seed deal.

The best part? No equity was given for those millions. It was an event that has changed how the venture world looks at the hardware category. Rather than being envious, VCs would love nothing more for the public to continue to take that early risk and vet whether or not they want a product. Kickstarter? Eh, not so much.

Romotive may have pushed the envelope on commercializing Kickstarter by doing two rounds on the site -- one after Sequoia Capital had already given it millions of dollars. You might ask, why should a company funded by one of the most powerful venture firms in the Valley be asking users to subsidize it, but both campaigns were successful nonetheless. The answer of course was that Romotive wanted the groundswell of community support more than the actual cash. A good strategy perhaps for a startup. But using the platform for mere marketing of a company with millions in the bank is even farther from the idealistic reasons Kickstarter was created. 

Towards the end of the year, the inevitable backlash began as press outlets started to harp on projects that were never delivered and whether donors should be reimbursed. That's put more pressure on Kickstarter founders to tell their own story, lest it be told for them. (Including from some pressure from their own advisors, I'm told.)

That's a lot of what this year end slide deck that's been making the rounds the last few days accomplished. The timing is interesting. Kickstarter could have well played itself up as the "anti-CES." Instead, its better-known tech companies barely get a mention. Not an Ouya Console or Pebble Watch to be found in its highlights of the year. What they omitted is as telling as what they included.

Let's take a look at the Kickstarter that Kickstarter would like you to know. There are the impressive top line numbers that other sites have reported: More than $319 million was pledged, $274 million collected from more than 2.2 million backers. Seventeen projects raised more than $1 million each.

The year of highlights definitely recognize the types of projects Kickstarter is most proud of -- and indeed, I don't fault them. They're the types of things there aren't other industries around to fund. They include 10 percent of the films at Sundance were Kickstarter-funded, FUBAR comic hits the New York Times Best-sellers List, New Baghdad is nominated for an Oscar, Chattanooga becomes the first US city with its own font, a Kickstarter funded opera premieres at the Kennedy Center, and sixth graders in Kentucky send a camera to space. There was even a Kickstarter-backed squirrel census in Atlanta.

Indeed, backing up Kickstarter's claim that technology projects are over-stated by the press, it breaks down each category by projects, successful projects, amount pledged, and donors. Technology only had 312 successful projects, compared to 5,067 for music. Hell, even Theatre closed 1,194 successful projects.

Notably, they divided technology and gaming, moving hardware projects like the Ouya into gaming. If hardware were its own category, it likely would have been far more dominant, as shown by the fact that games got the most in absolute funds with some $83 million. Film and Video ranked second with nearly $58 million.

But even by pulling some hardware projects out, technology owned one stat that may explain why it gets so much attention despite Kickstarter's subtle efforts to the contrary: On average, successful technology projects raised more than any other category, narrowly edging out games which was by far the second most. That may have well been skewed up by a few outliers. And to be sure, not everything in those categories was a commercializable product. One highly impractical one we loved was Stompy. Still, nothing drives press attention like single deals getting jaw-dropping amounts of cash.

Ultimately, while I wish Kickstarter was more media-friendly, I think this report does a good job of communicating what they value and why they value it. It's impressive flipping through a best of list of projects that gained critical attention, and may never have been funded any other way. They use data to nicely back up that that's the bulk of what happens on the site -- at least in terms of absolute cash and absolute closed projects.

As exciting as I think the resurgence of hardware in the Valley is, even I have a hard time arguing Kickstarter's real impact on the world last year was helping a Sequoia-funded company raise even more money.

[Image courtesy Scott Beale]