E039 - Jon Leland from Kickstarter

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Thank you very much for listening to the Green Element Podcast. We really value your opinion, and we're wondering if you could take part in a survey that helps make this podcast better, please. www.greenelement.co.uk/podcastsurvey. I hope you enjoy this episode. Today's podcast is with John from Kickstarter. I was really looking forward to this podcast because, I mean, we all know Kickstarter and we all know exactly what they do as a crowdsourcing platform, but they— I wanted to know what it was that Kickstarter are seeing within the new entrepreneurs. And are people being more sustainable? Are people running more environmentally friendly companies? And, well, we find out the answers. And yeah, brilliant. Can't wait for this show. So, Jon, thank you so much for coming on the Green Element Show, and welcome to the Green Element Podcast.

Thank you.

Can you tell us a bit about Kickstarter? I mean, we all know about Kickstarter and I'm looking forward to hearing more about it, but tell us more about the purpose and who you work with and a bit about that kind of B Corp model that we were talking about before.

Sure. Kickstarter is nearly 10 years old at this point. Not everyone knows what it is, so I won't assume everyone does that's listening. Kickstarter is a crowdfunding platform where people raise money for creative projects spanning from fine art, music, film, to new inventions like the Oculus Rift was originally funded on Kickstarter. Board tabletop games, board games, books, kind of any creative project can be funded on Kickstarter. At this point, we have seen over $3 billion raised on the platform for creative projects, and more than 120,000 projects successfully funded on the platform. We, the founders, it's a small company, relatively speaking. We are very large and a global company, but we're only about 150 people. It was founded with the mission of just helping people bring creative projects to life, is deeply rooted in the value of creative independence for creators and individuals, right? Like providing a pathway for people to make things outside of traditional large corporate structures and interests. And the capital that people raise on Kickstarter enables them to make things that otherwise couldn't get made in any other context, whether that's a video game about This is an example, a video game about a man who lost his son to— his 5-year-old son to cancer, and he made a video game about that. It's a very beautiful work of art, but it's also not something that any video game publisher is going to finance. It also enables people who don't have as ready access to capital to raise funding for things and tell their own stories. So we see particularly a lot of marginalized communities come to Kickstarter to raise money for kind of where they tell their stories and make creative work, whether that's in film or comics or publishing. A few years ago, when laws in the United States changed to allow for public benefit corporations to exist, which enables a for-profit company to have a mission other than maximizing shareholder value, we, the founders, made the decision that they wanted to change the company into a public benefit corporation, because their aim with Kickstarter has always been not to get rich, or go public, or get acquired, but to really build a sustainable company that serves the public interest. And so we all unanimously voted to support that transition, and so we've been a PBC for the last 3 years or so, with really that core goal of supporting creative independence as the core mission, but also including other public benefits in our charter, including environmental commitments. And there we sort of see our environmental commitments along kind of 2 tracks. There's looking at our own operations as a company, which I think is pretty standard environmental practice for a corporation. With us, we aren't a huge company. We're not Google with thousands of employees. We're mostly a small group of relatively young hipsters in a cold, old factory in Brooklyn. They're definitely— we're definitely doing our part on not cranking up the heat all the way frequently.

I like the fact that you're wearing a jumper. Yeah.

But for us, I think we see the greater opportunity for our impact to be on how we govern the platform itself, because there's so much activity that's that economic activity and consumer activity that happens on the platform itself and is started from the platform. So we've had several, not just the amount of exchange and production that happens through our platform, but even what that leads to in the end, because there's several billion-dollar-plus companies that have gotten their early start on Kickstarter. So how can we create an environment where we are incentivizing those projects and those companies to be taking environmental considerations into account. And that's really where we've started a lot of our work as a PBC on this front.

And I mean, I've subscribed to the Kickstarter newsletter and you do promote certain projects over others. Obviously you can't promote every single project. Do you promote the more social purpose-driven projects or the environmental projects or ones that are changing society in a positive way?

Yeah, I mean, it's not the only consideration, but that is definitely— and we try to curate with a balance, but that is certainly, if you look at our newsletters and our site, you'll see that those projects get— that's one factor that goes into the equation of what we choose to curate. It's a very strong factor, and particularly with environmental impact, it's something that we want— we look to understand. And there's a few different types of projects in terms of their environmental impact, which we can talk about, but that's something we obviously look at in terms of curating and highlighting projects. That's what we want to see on the platform.

Yeah, okay. And would you turn down a project, say I am going to go and drill loads of oil in my backyard and I've worked out a new method that I'm able to, you know, get that oil out really quickly and really cost-effectively by— I've designed this great new machine.

Right.

And I want to Kickstarter it. I want to go, yep, I'm going to go on that platform, Would you— do you say no to that? Do you, you know?

At the moment, we're an open platform. So as long as you meet our basic rules, you're allowed to launch on the platform. So that's— we would allow it. We certainly would not highlight it and probably unhighlight it.

I was trying to think of the worst thing that you could possibly come up with. I don't think anyone would come up with that because I'm not sure if it would be possible. And A, I'm not sure if it would be possible. I don't know, it probably is.

There's the— on one side of it, there's a lot of bad projects that are optimistic about this sort of thing. We sometimes see a lot of prototypes for perpetual motion machines. There's a lot of people trying to try to get to free energy through a crazy Kickstarter contraption. And those we will reject if people are promising something that's unrealistic.

We will reject it. I remember talking to a news company and we were going to set up a series of going around the world talking to those type of people and watching these things work because it is fascinating how people genuinely think they could get this free motion. I had a director and a producer that were interested in doing a series and we were pitching it to companies to finance it and it never did go anywhere. But I thought it'd be brilliant because—

Yeah, it'd be a fascinating community.

To be able to record it and go, it actually does work. But the thought was none of them are actually going to work.

That is true.

So what would you say Kickstarter's business superpower was?

What was our business superpower? Kickstarter has risen a wave of goodwill, and Kickstarter hit at the right time. It was a great idea. got lucky and it rode a kind of rocket ship to success. But that has only been possible, I think, through staying true to the core values of the company. Because at the end of the day, we've seen other people try to enter the space. And sort of 2 things have kept us in the dominant position that we've been in. One is the business model. We made the business model very unappealing for even us almost to be in.

Hmm.

5% as a platform fee is just incredibly low. When you compare it to selling something on Amazon or something like that, or an e-retailer, which is like 30, 40% or more frequently. In terms of the platform fee, our platform fees are really low. And actually, that is a— it wasn't intentionally done this way, but it's made it almost impossible for anyone to have a smaller— to have a business that encroaches on it, 'cause it's a very hard business model to get to work. And we're just hearing from Patreon, who has the same fee structure that they're— because they took so much venture capital money that they can't use this model anymore. But the other is just that we've remained true to our values. Our superpower is that, like, because we did not take venture capital, much venture capital money early on, and we've been able to remain financially independent, when we talk to independent creators, we talk to artists, we talk to entrepreneurs, and we say that our interests are aligned with yours and we want to help support their development, we— they know that we're speaking to them honestly about that alignment rather than trying to extract value from users, which I think usually is unfortunately frequently where platform technology companies wind up going eventually because of the financial pressures that are put on those companies. It winds up being extractive. And the users are where that value is extracted, unfortunately.

Okay, and when it comes to running an ethical and sustainable business, what would you say has been your biggest struggle, and can you tell us a bit about how you've overcome it?

I'm not sure we've necessarily overcome it yet. The biggest struggle is How the advantage of having just profit as an objective is that it's very clarifying.

Hmm.

And that's a very powerful thing that allows the amount of focus and clarity that provides essentially decision-making, if that's all you're trying to do. And so the challenge to actually run an ethical business, which I think is a worthy challenge, is, well, how do you balance that? You have to succeed as a business, and— but we aren't willing to sacrifice at all our mission and our values. So how do you balance that out? And that's— it's not something you solve, it's something that you grapple with. It's a far more human— it feels like you are a voice inside the conscious of a human, you know, that's trying to manage their way through its development, rather than just a machine that you're trying to optimize to crank out cash on the other side. And so it's almost a different endeavor in quality. But the challenge there is just having that same kind of sharp focus and cohesion in terms of what you're aiming at and how you aim to get there.

Okay. And we were talking before about the type of companies that come on Your platform. Have you seen a trend at all in more, I guess, environmentally friendly?

Yes, particularly in fashion design and technology and actually food as well. There's been a lot more movement towards having sustainable components of their— either sustainable manufacturing and process to produce that good, or goods that themselves are targeted at, you know, environmentally positive impacts. So whether that's like Nebia, which is a showerhead that reduces water consumption by 70%, or there's been conservation projects like Invest the Invest the Nest, Invest in the Nest, which are, which are penguin, endangered penguin sort of homes, um, things like that. There's, there's really weird, very interesting projects that have cropped up. Pleistocene Park is one of my favorites. It's a father and son in Russia who are reintroducing wild herds into areas of like the tundra that are, um, basically unfreezing due to climate change, which released a lot of methane gas and emissions. And so, but what they've learned is that back, you know, in previous eras of history, there were woolly mammoths in these areas, and those mammoths like basically tamped down the tundra and kept it frozen longer. It was more— it had more resilience to warmer temperatures. And so they're trying— they're reintroducing large herd animals to try to compact the earth in these areas to reduce greenhouse gas emissions from unfreezing permafrost.

Wow.

It's fascinating. So we're seeing projects like that as well. Sustainable food systems is actually really big right now, an alternative sources of, like, protein. Um, so we'll see a lot of, a lot of things made from grasshoppers and crickets. Um, you know, it's— there's a lot of exploration happening and a lot of innovation that's happening of, like, how can we create, uh, clothing, food, goods that are actually ethically made? Um, a lot of recycled plastics, a lot of ocean plastics going into goods. These days. And again, it's something where you'll see maybe sometimes larger companies play around with these concepts at the margins, but almost as a branding gimmick. And these entrepreneurs are starting their companies from that perspective, which is great. And then it's something that I don't think is facilitated very easily within large corporate contexts.

It is, it is really cool to see some of the projects that are coming out now. There's, there's that, um, isn't it? There's a kid in California that has designed that, um, collecting litter machine.

Yes, the, the Ocean Cleanup project. Yeah. Um, I think that's just getting underway if I recall correctly. Yeah, I'm excited to see how that project goes. It's got a lot to clean up.

What's great is you do see an awful lot of projects like that come out of the US. Um, and we all know politically how it is currently, but I put it in inverted commas because I genuinely don't think it makes much difference. And almost you're seeing more environmentally friendly products coming out At least from seeing it from the outside.

Yeah. Certainly entrepreneurs are starting to increasingly take up the mantle of that. A few months ago, we introduced a new section of project pages that allows creators to detail the environmental commitments that they're making in their project, so that That touches on environmental manufacturing, sustainable materials and recyclability, sustainable shipping. I'm trying to think of what the other ones are. And that creating that structure allows everyone to sort of see what— one, it incentivizes creators to make those commitments. Because it adds and differentiates projects. And honestly, creators in our system are constantly looking for ways to stand out more. So making one of these commitments, which are, let's say, long-lasting design, reusability and recyclability, sustainable materials, environmentally friendly factories, and then sustainable fulfillment and distribution. So those are the 5 areas that we've sort of carved out where creators are making commitments in how they're producing their goods. And then we've created resources for creators to understand how to get started with those practices and incorporating them into their products and businesses as they get started. 'Cause our goal there is to really get entrepreneurs and founders to incorporate these values and practices from the beginning of their of their product development process and beginning of their businesses, because it's much easier— it's much better to do that than sort of tack them on later. But there's not many resources for entrepreneurs out there.

I guess you could use the scaled-down version of the B Impact Assessment. I think New York's got one, hasn't it, for their businesses? I know that I live in Scotland and we've got Scotland Can Be, and because they're using— we're the first country in the world to have a form of B Corp assessment on companies, which is fascinating, and it'll be interesting to see where it goes with that. And I've been talking to investors, I've been talking to people in government, and they've already, 6 months in, have noticed a change in new companies, and there are more social purpose-driven companies that are being taken through just through the advertising of, why don't you take this assessment? It doesn't cost anything, just go through it and you can see where you stand and whether you can be more purpose-driven or not.

Yeah, that's great. Yeah, it seems like the momentum is shifting quite rapidly in in this, at least in the United States, the momentum towards actually solving this problem and finding more sustainable ways to conduct our life is rapidly improving, which is great. We have a long way to go to really fundamentally tackle the challenges, but over the last year, there's been a market shift in the way people are recognizing and starting to tackle the fundamental issues about the unsustainable ways that we currently live and consume and produce goods.

And do you— is the majority of your companies from the US, or they really are just from all over the world? There is no particular—

I mean, the lion's share is from the United States, but it's, I think, a bit less than 50%. And then the rest come from kind of all over the place. The UK is very big, Canada, Germany, France, Singapore.

That's really good to hear. You've seen a shift over the last year, particularly as the biggest share is the US as well. So yes, that's really good to hear. Because you always— you do worry and you do think, but I kind of try and tell people, don't worry too much, honestly.

You have to strike the right balance. You have to worry somewhat, but you can't get paralyzed by it. So it's hard to calibrate that level of concern in a society.

So have you got any advice or learning that you can give to our listeners on— I guess you've seen so many projects that have been started and stuff. What would be your advice if you were to start a project up and potentially launch on Kickstarter, or potentially not, you know, just starting up a company? What sort of things you would do to put in place?

Yeah, I mean, I think as founder, when you're starting something, it's really important to Get the foundation of what you're doing, what your values are, and very clearly state and stick by what those values are from the beginning, 'cause that makes conversations with investors or potential customers or wherever you're going to grow your business, those values are kind of what carry you through and shape that conversation. I think right now it is actually easier, at least in our world, It's an easier path if you're taking environmental values into consideration from the beginning, because it's what so many people want to see out of the businesses that they engage with, and it's only going to get— that clamor for those values is only going to get stronger. So I think that the practice there is, one, do your research on how you can build an environmentally sustainable company. Because I don't— it's gonna get harder and harder for non-environmentally sustainable companies to succeed. Right now there's a competitive advantage in being environmentally sustainable. Bake those values into, and those practices into your company from the beginning, because it's easier to do that than tacking them on later. And find a way to tell the story of your company when you're going out there either to raise money from investors or just launch the product or come to Kickstarter, find a way to tell that story in a way that will be authentic and resonate with people and allows them to not just engage with your— whatever you're doing from a business perspective, but also from a values perspective where they feel aligned with those values. That's a far more powerful relationship. And in our world, we see that, the power of that relationship, because that's really what drives success for campaigns, both in the short term and the long term. It's a much stronger relationship.

Brilliant, thank you. So where can we learn more about Kickstarter? And obviously a lot of this, all of this will go in the show notes, but where can we learn more about Kickstarter?

Kickstarter.com is a good place to start. If you go to Kickstarter.com/environment, You'll also see our guide to how to incorporate sustainable practices into your product development process for people that are making physical goods. So that's also an interesting place to look.

Brilliant, brilliant. John, thank you so much for today. Thank you for being on and sharing your knowledge on where companies are going. And it's brilliant because you kind of come away from this positive going, More and more companies are being more environmental. Brilliant. That's all we care about.

That's what we want. I mean, it's what we desperately need.

So thank you very much for sharing that.

Thank you.

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