Kickstarter comes of age as a big-time funding platform

Kickstarter’s exploits as a fundraising platform have been well documented but the company is now entering some uncharted territory. For the first time, not one but two Kickstarter projects eclipsed the $1 million pledge mark, within hours of each other yesterday. All told on Thursday, Kickstarter received $1,605,981 in pledges, blowing past the previous one-day record of $736,730, set the day before.

The Elevation Dock, an elegant iPhone dock passed the $1 million mark Thursday a little after 2 p.m. with a couple days to go before its deadline. It now sits at $1,163,192 with more than 10,000 backers. A little less than five hours later, Double Fine Adventure, an adventure video game proposed by game veteran Tim Schafer, shot past the $1 million mark in less than a day and now has a total of $1,345,382 with about 37,000 backers. It originally launched Wednesday night with the goal of raising $400,000, which it reached within eight hours.

“It’s really exciting and interesting,” co-founder Yancey Strickler told me in an interview. “If it was just one project hitting a million dollars, the story is about this cool project, but with two, it’s about what Kickstarter provides and how it’s maybe an efficient way to turn audiences into dollars. Certainly, today people are looking at Kickstarter differently than before.”

The milestones highlight the bigger momentum behind Kickstarter, which is rounding into form as a funding tool. Seven of the eight biggest funded projects in the history of Kickstarter have been launched in the last three months, and there is at least one new project that could be on pace to join the million dollar club in the coming weeks. Strickler recounts in a blog post the crazy 24 hours starting Wednesday night when the two projects started their run past a million dollars.

The Double Fine team celebrating

Previously, the TikTok+LunaTik multi-touch watch kits came close to hitting a million dollars in pledges with $942,578 pledged after launching in December 2010. A year later, Hidden Radio has raised $938,771 with 5,358 funders and Printrbot, a 3-D printer kit, has managed to raise $830,827. Most of the successful projects have received a modest average of $6,300, but that figure has steadily grown over time.

Strickler told me he’s still trying to wrap his head around the achievements. He said Elevation Dock was expected to eclipse the million dollar mark but Double Fine Adventure was a surprise.

“It’s an incredible validation and a great sign of how this platform can work. I have no idea if we will see a lot of these million dollar projects or if these two are the only ones for the next five years, but I do like what it says about the kind of opportunities here and the kind of scale you can do by working with fans.”

Strickler said the Double Fine project was especially rewarding because Tim Schafer, maker of Psychonauts, was a hero to a number of people at Kickstarter. Cindy Au, a community support staff member at Kickstarter had some informal talks with Schafer’s partners, but it was Schafer who decided to launch his project on Kickstarter. Strickler said the funding shows how Kickstarter can be a game changer in the video game business, similar to how the success of TikTok opened up the market for product design.

Kickstarter’s success has been exploding since its launch in 2009. Last year, it hit $100 million in pledges, up from $28 million in 2010. And it had 27,086 projects launched last year, compared to 11,130 the previous year with a 46 percent success rate for fund raising.

The momentum isn’t just reflected in the sheer number of projects. Kickstarter is becoming a powerhouse in helping quality films get made. It had 17 films in the Sundance Film Festival, or 10 percent of all the films there, and had three documentaries shortlisted for the Academy Awards.

Strickler said Kickstarter embraces the idea that it can be used for much bigger endeavors. But it’s still trying to keep the focus on creative projects, not on building companies. He said the magic of Kickstarter is that it’s not just another form of capital. In the venture capital world, a project is only funded if there’s a chance it can make money. What Kickstarter is doing, he said, is giving an opportunity to projects that may have dimmer chances of making money but are still worthy of being made:

“From an investment perspective, VCs are looking to make money, but that only happens with very few things. Ninety-nine percent of products fail, so very few things should exist. But if the question is, ‘Do I want this to exist?’, a lot more things become possible. That’s the disruption of Kickstarter, changing the question from ‘Can this make money?’ to ‘Should this exist?'”

In the case of Double Fine, Strickler said traditional VCs and publishers were not likely to fund Schafer’s vision of an adventure game. But by opening up another funding channel, Schafer can go direct to his fans. That’s something that Kickstarter is making possible, going around the studio or publisher layer that keeps fans from directly supporting the content and projects they like.

The Kickstarter crew celebrates

Strickler said he believes other creators are going to take note of the milestones because they show that even bigger projects can be undertaken through Kickstarter. And it can be a platform for creators with a large following. He said he expects some of the excitement around hitting achievements like a million dollars to fade away as crowd-sourced funding increasingly becomes normal.

“This is the year when we see this kind of creative funding start to go mainstream. It’s less of a novelty thing, and this will become just the way we make things. This is a transition we’re excited for,” Strickler said.