Peak Kickstarter? What 182K Kickstarter Campaigns Tell Us
Kickstarter pioneered the crowd-funding model in 2009, successfully rode the crowd-funding hype cycle that occured in the mid 2010s, and transformed to a public benefit corporation in 2015.
During the hype-cycle that culminated in 2015, memories of Pebble’s Smartwatch raising millions were still fresh. Professors launched crowdfunding courses and the New York Times, Wall Street Journal, and Financial Times routinely featured crowd-funding focused pieces.
The question explored in this article is what happened after the hype subsided?
To answer this question, I analyzed a publicly available scraped dataset¹ containing the details of ~182,000 unique Kickstarter campaigns. The data suggests the following:
1. The impact of Kickstarter is decreasing — growth in the number of campaigns has stalled and per campaign fundraising totals are not increasing.
2. Kickstarter is primarily enabling small scale creative expression rather than launching new businesses
3. Success on Kickstarter occurs at uneven rates across the United States; campaigns based in the northeast and west-coast are more likely to succeed
4. Endorsement by Kickstarter dramatically improves the expected outcome of a campaign, doubling the median amount raised
In the following sections, I will present the data behind these findings and explore the implications.
The dataset this analysis is based on was originally compiled by a web scraper and contains 189K unique campaigns skewed toward 2014 and beyond. Given Kickstarter has hosted 441K campaigns all time, the findings are based on a sample which represents ~43% of the total population. Due to the reliance on scraped data, which is inherently noisy, the analysis should be interpreted as directionally useful, but not precisely accurate. The data and code to support this analysis are available in a public repository on Github.
1. The impact of Kickstarter is decreasing
Since 2015, the crowd-funding landscape has changed considerably. Overall interest has waned², with platforms such as Kickstarter increasingly doubling down on specific niches (e.g., creative expression) rather than new business creation.
The data suggests Kickstarter campaigns peaked in 2015, with the number of campaigns annually stagnating at pre-2014 levels.
To be clear, Kickstarter’s mission has always been enabling creative projects, which it absolutely does in many niches. However, the hype associated with Kickstarter’s potential to empower a generation of new brands and entreprenuers seems to have cooled considerably.
While Kickstarter’s hyper-successful campaigns garner media attention, the reality is that the average successful campaign raises modest sums of money (median raise is ~$5K).
Approximately, 0.2% of successful campaign’s (0.001% of overall) fundraising total is greater than $1M. As shown in the above chart, in 2018, 75% of successful campaigns raised ~$15K or less.
2. Kickstarter is primarily enabling small scale creative expression
Kickstarter’s most prolific creators, those who have launched at least 35 campaigns, are significantly more likely to hit their fundraising target than the average creator — achieving their fundraising goal 95% of the time. However, the fundraising totals are modest (average raise of ~$3K) and the top categories suggest campaigns primarily focused on creative expression (the top categories are: Playing Cards, Illustration, and Indie Rock).
Returning to the general population of campaigns, there is a clear reliance upon moderate pledge amounts per backer, with the average successful campaign recording an average pledge of ~$62.
Given that campaigns typically have a range of rewards available to backers based on pledge amount, it seems probable that successful campaigns offer a moderate reward tier between $20–50 designed to appeal to the bulk of backers and a high-priced tier (>$100) targeted at their most passionate backers.
3. Success on Kickstarter occurs at uneven rates across the United States
One surprising finding is that the success of campaigns seems to be related to geography. Although the geographic distribution of campaign creators roughly matches the overall distribution of population, the success rate of campaigns varies significantly based on geography.
For example, campaigns with creators based in Florida succeed just ~36% of the time whereas campaigns based in Vermont succeed ~72% of the time. It is unclear why this relationship exists, a few potential hypothesese are:
- Creators often rely on a group of local supporters to hit their initial fundraising targets and people living in the northeast and west-coast are more comfortable supporting crowd-funding campaigns
- Urban areas enhance creators ability to leverage word of mouth to generate interest
- Colleges, particularly those with strong art and business focuses, are strong supporters of campaigns. Colleges with these profiles are disproportionately located in the northeast and the west coast
The below table offers a more in-depth look at the data behind the ten states with the highest campaign success rates:
4. Endorsement by Kickstarter dramatically improves the expected outcome of a campaign
Like many platforms, Kickstarter exercises its influence on the success of creators through designations such as ‘Staff Pick’ that add credibility and visbility to campaigns.
Approximately 10% of all live campaigns are designated as a ‘Staff Pick.’
The expected success of a ‘staff pick’ campaign is signficantly higher than non-staff pick campaigns.³ For example, within the dataset, ‘Staff Pick’ campaigns succeed 95% of the time while non-Staff Pick campaigns succeed less than 50% of the time. Moreover, ‘staff pick’ campaigns have a median fundraising total that is ~2x higher than the average fundraising total of successful campaigns.
Summary
Interest in Kickstarter peaked around 2015, since then the platform has increasingly focused on creative expression rather than business creation. Kickstarter’s stalled growth is shown through the lack of annual campaign growth and the modest median fundraising total per successful campaign.
Three success factors uncovered through this analysis are: (1) if the campaign is led by a repeat creator, (2) where in the United States the campaign is based, and (3) whether or not the campaign is designated as a ‘staff pick’. This, of course, is nowhere near an exhaustive list of the factors that determine campaign success.
As a reminder, the code and datasets behind this essay are available within a repository on Github. I welcome feedback on how this analysis can be improved.
Footnotes and Citations
[1]: Dataset sourced from Web Robots, a web scraping company, on March 24, 2019. Data was extensively cleaned and formatted to enable exploratory analysis. More information on the dataset and cleaning process is available here.
[2]: A Google Trends report for “Kickstarter” verifies the assertion that interest in the platform has diminished over time:
[3]: An independent samples t-test was conducted to compare the campaign success rate of ‘staff pick’ campaigns and non-’staff pick’ campaigns. The analysis produced a signficant t value (t-stat: 115.8, p < 0.01). Thus, the null hypothesis that there was no significant variation in the average success rate between the two groups was rejected.
