A lot of Silicon Valley startups purport to do social good. Not many of them legally commit themselves to it, to the direct detriment of their bottom line.
So for Kickstarter to reincorporate as a "Public Benefit Corporation", and explicitly state that its goal is to do good, as well as make profit, is both a risk and an inspiration.
It's also a move that is reasonably unprecedented for a company of its size, and potential growth. The legislation is still very young, and it doesn't mean that a sale or IPO is impossible. But it makes a public statement about the company’s commitment to social good, and is coupled with a pledge to put ethics and creativity over profit.
Kickstarter has also added their own stipulations on top of the legal commitments, such as encouraging transparency, refusing to sell or go public, and pledging to donate 5 percent of post-tax profits to arts and education charities.
So why did they do it? "We wanted the company to operate as a Public Benefit Corporation for really for as long as it has existed," co-founder Yancey Strickler tells WIRED. "It's always been the plan to re-incorporate the company, where we are ascribing these values, our mission and our idealism in the deepest possible levels of the company. This is a codification of the mindset that has always guided us, but it's making permanent something that is deeply held, and it's something that we're holding ourselves publicly accountable to -- to be a company that is mission driven, and values driven, and is not going to make the sorts of compromises that companies are often forced to make."
Kickstarter was created in 2009 by Strickler and his co-founders, Perry Chen and Charles Adler, and has taken payment from 7.8 million backers, which accounts for about $1.5 billion in project pledges. It is, simply, a success, and -- if sold -- would be a sizeable addition to the world of public tech companies. And yet, the company is adamant it will not now take that route.
"I think we all come from this place of just feeling quite fortunate and quite thankful for being part of this amazing community that is New York City," says Strickler, explaining why Kickstarter is going in its very different direction. "From all the ways the company has benefitted from the creativity and generosity of people who use it, and just in general finding much more meaning in that, and the potential of those things than in the potential for personal wealth."
Within startup culture, or American culture more broadly, wealth production is often seen as a means to its own end. Social good may result from a companies products -- say, helping users share photos more easily. which makes them happier -- or from wealthy individuals donating time and money to good causes. But for a company to explicitly make that part of its mission is "somewhat radical", Strickler admits.
"I do think it’s somewhat radical in this day and age to think about a company being legally required to benefit society," Strickler tells WIRED. "I think that companies forming today often have some values sets at their core and we believe we are part of a growing movement, but for us this just reflects the culture of our organisation, of just embracing the idea and being part of something bigger. That our own success should not come at the expense of others, that true leadership means taking action where everyone benefits -- not just yourself."
Kickstarter certainly sounds like a nice place to work. According to Strickler, the change passed without a single note of dissent. Even the shareholders were happy. "We were prepared for [dissent], and thought a lot about how to best represent it, but there wasn't a single dissenting vote, not a single word of caution or concern among our shareholders. I mainly saw just a strong sense of pride."
Kickstarter is premised on finding projects that people feel the world needs, but also -- and fundamentally -- sourcing money for those projects. As much as the legal change to a PBC appears to eschew a lot of the arguably fundamental selfishness of capitalism, Kickstarter says it will still continue to help projects crowdfund.
Did Yanis think that the products emerging out of Kickstarter might change after a public shift in ethos? "It's a great question that I do not know the answer to. I certainly hope that the idealism and optimism that we feel is communicated through the product," he tells WIRED. "I believe that the creative communities that we serve are likely to have some of the same values that we do, and will find it meaningful that a company is challenging itself to do things differently. I do believe that there might be some good will from that. So I’m hopeful that, as Kickstarter PBC, that idealism and drive will just accelerate. We’ll see how the public respond."
Kickstarter is clearly optimistic about starting a trend, and wants to set a precedent in the startup community along with other organisations like This American Life and Ello, who are also PBCs. "I do believe it’s a growing movement and I do believe it can increase, and I think there are more and more companies that will be acting in this way. We've demonstrated that creativity has more value than the market itself."
This article was originally published by WIRED UK
