The study, undertaken by Professor Ethan Mollick of the University of Pennsylvania, was released last week. Mollick had been closely following the crowdfunding platform since its creation seven years ago.
Kickstarter’s purpose is to fund creative projects by providing a platform for people to fund these projects through donations from backers. Creative projects include films and videos, fashion, games and journalism. According to Kickstarter’s website, the platform has launched tens of thousands of projects of all sizes through the support of “the Kickstarter community.”
The Wharton School assistant professor found that from its beginnings in April 2009 to May 2015, 8,800 companies and non-profits have been created and more than $5.3 billion was generated for the projects’ creators and backers. The professor also found 29,600 full-time jobs were created and the successful projects resulted 283,000 part-time jobs for collaborators. He also found creators, on average, generated revenue of $2.46 for every dollar invested.
Mollick said, said the model has fewer barriers than other funding models such as money from grant-makers, film studios and venture capitalists. If an idea sounds good to enough people, anyone, regardless of their background and experience, can obtain funding.
One of the biggest and most successful projects was Oculus Rift that was bought by Facebook for $2 billion. Another successful major project was the Pebble smartwatch. But there have been failures as well.
A lot of publicity has been generated around Kickstarter failures but Mashable reports the failure rate for projects is only 9%. Mollick found 82% of the 8,800 companies and non-profits created through Kickstarter are still operating. The professor characterized the failure rate as “low.”
But according to Kickstarter, more projects have failed to obtain funding than those that have. And in earlier research, Mollick found almost one in 10 successful projects failed to deliver rewards that were promised to their backers.
The study reports Mollick surveyed 61,654 successful projects and found 37 percent of respondents said Kickstarter helped advance their careers. Of those who responded to the survey, 21 percent said they were earning more income as a result of their Kickstarter projects.
Some of the data provided to Mollick came from Kickstarter although the company claims it did not try and influence the professor’s analysis.
The study can be found here.
