Crowdfunding for the Socially Good Mission by Perry Chen

Perry Chen

"I live in Brooklyn I don't consider myself a social entrepreneur, but I'm thrilled to be doing good, if that's what I'm doing."

- Perry Chen

An idea can be big, but it's nothing unless realized. The same goes with Perry Chen, a New York City-based artist, that has worked a number of jobs before becoming known to be the co-founder of Kickstarter, a crowdfunding internet company that specialized in providing financial support for philanthropic and artistic endeavours by linking project leaders with a vast online community of investors.

As the man behind the brilliant idea, Chen struggled in his early days of life. But by realizing his idea, he has changed everything he knew, especially the world where artists and creative minds helped shape and color the world.

The project has earned him awards and rankings as one of the most influential people.

Early Life

Perry Chen was born on July 15th, 1976. He was and raised in Roosevelt Island in New York City by his father, who was a schoolteacher, and his mother, who was a social worker. His parents' spirit of service and respect for creative pursuits have helped much in shaping his character. Chen was a bright child, but admittedly an indifferent student during his teen years.

After finishing Hunter College High School in New York City, he attended Tulane University in New Orleans, and received a Bachelor's degree from the university's Freeman School of Business in 1998.

Chen also had attended Hong Kong University of Science and Technology, and picked up some DJing and audio-engineering skills along the way to fulfill his dreams in becoming an electronic musician. In early 1999, he moved back to New York City and worked as a day trader. "It was like playing video games," he remembered. "No phone calls, nothing that made me feel terrible like sales." He earned enough income to open a small art gallery in Williamsburg, but returned to New Orleans in 2001. There, he DJed while working in a restaurant and as a preschool assistant.

Chen also has experience in working as a day trader, waiter, co-author for a book about tattoos under a pseudonym, and an online T-shirt business.

The Kickstarter Idea

When people see Kickstarter they don't see it as a company. Instead, they see it as a social movement where people doing things for people. The idea behind Kickstarter came out from difficulties.

"At its core, Kickstarter is a very simple idea. We believed that if we could just get it out there into the world, and get people to use it, that their success would beget more success, and more attention," said Perry Chen.

In late 2001, when he was living in New Orleans and working as a musician, Chen experienced difficulties in getting Kruder & Dorfmeister, two Austrian disc jockeys, to play a show during New Orleans' annual JazzFest, and venue the management to commit them to do performance without money up front. But the DJs replied that a single-night show would require a $15,000 fee plus airfare, a requirement Chen couldn't afford.

"I had this feeling that this was a problem that should be solvable," said Chen. "There was a possibility that the artists would have a great show and everybody would have a great time. But none of that could happen because the decision had to be made by me - based on my own resources. There was an inherent flaw in that."

Frustrated because he was unable to organize the concert, Chen had an idea to connect investors with artists and musicians that would then enable them to produce, develop, and promote their work.

At that time, he imagined a process in which audience members could pledge money to see a performance. If enough money to cover the production costs of the performance was pledged, audience members would be charged and the show would take place.

But that idea remained just "an idea" for some time before implemented. At that time, Chen wasn't in the position where he wanted to start a company or, really knew how to do it, especially in the web space, where he had no experience or knowledge. He was living in New Orleans and still thinking about continuing his work on music.

"I had the idea, and then I was like, 'That's a good idea. Now, back to my regularly scheduled life,'" said Chen.

Creating Kickstarter

It was in 2005 when Perry Chen returned to New York and and began waiting tables at a Brooklyn eatery called the Diner. One of his regular customers was Yancey Strickler, the editor-in-chief of the online music site eMusic.

Strickler was the first person that Chen told about his idea to harness the connectivity of the internet to help artists that are struggling to connect with the public. Strickler was fascinated by Chen's idea. The two began raising funds on their own for the project, and in 2007 they recruited a web designer named Charles Adler to lay out the look of Kickstarter's beta site.

They were able to convince some friends and family members to invest on their idea for a crowdfunding site. Their very first investors included comedian David Cross, whom Chen knew through his cousin, and Chris Kaskie, publisher of the indie-scene internet success Pitchfork Music.

Kickstarter launched its service on April 28, 2009, as KickStartr. At first, it was invitation-only, and friends of the three founders were the first early adopters. Kickstarter's first ever pledge was made by its co-founder, Strickler, for $20. The very first project Kickstarter funded after its launch was called Drawing for Dollars by raising $35 from three people. The first big pledge goes to a band called Five Times August, which raised $20,000.

The idea that was original and creative, has quickly made Kickstarter the largest website devoted to crowdfunding. Kickstarter quickly garnered the attention of venture capitalist firms and several wealthy executives, earning themselves $10 million in investments. The most notable of these early projects was the Pebble watch, a small digital watch with an e-ink screen that is capable of being loaded with third-party applications. The idea had been rejected by major firms but received more than $7 million through Kickstarter.

Within four months, a hundred projects had been successfully funded, and more angel investors and venture capital firms began pouring their funds.

With a business model that differs from most businesses, Kickstarter rely on the percentage the website got from investors crowdfunding people to cover its expenses, rather than relying directly on investors like most do. Kickstarter generated its revenue by assessing a fee of 5 percent from projects that reached or surpassed their funding targets. Projects that did not meet their funding goals within a specified time period did not receive any money pledged to them, and they were not subjected to the fee.

Chen describes the funding model on Kickstarter as "somewhere between commerce and patronage."

"It's not an investment, lending or a charity," Chen explained. "It's something else in the middle: a sustainable marketplace where people exchange goods for services or some other benefit and receive some value."

Kickstarter gathers the communities on the internet. The network has helped communication and creativity easier than ever. It's easier to learn, it's easier to share and collaborate, and with Kickstarter, it's easier to find supporters, Chen explained.

As more projects quickly followed, Kickstarter became profitable within its first year of existence. The company reportedly first became profitable in mid-2010, though the company remains privately held and therefore exempt from having to publish financial data.

Another successful Kickstarter project came in 2013 when producer Rob Thomas turned to the website to fund a movie based on his television show Veronica Mars after Warner Bros. turned down the project. In just ten hours of his project being listed on site, Thomas had attained his $2 million goal. Actress Kristen Bell, the star of the series, said, "It's never been possible to let fans directly influence whether something gets made. Kickstarter has changed all that."

Leaving Kickstarter

Perry Chen served as Kickstarter's Chief Executive Officer from its founding. In October 2013, after revolutionized the world of crowdfunding as co-founder and CEO of Kickstarter, Chen stepped down from his position as CEO and became its chairman, effective as of January 1st 2014.

As of 2013, the company had funded tens of thousands of projects from investor donations totaling several hundred million dollars. The projects ranged from helping individual artists and musicians complete and promote their work to covering the development and production costs of an independent film or a video-gaming system. In 2014, Kickstarter marked a new milestone: 1 billion dollars pledged.

After leaving the CEO position, in which Yancey Strickler took his place, Chen then pursued his talents to his new project called "A Dollar A Day" where everybody who joins commits to donating $1 per day, which goes to a new nonprofit that gets featured every day. The non-profit website was launched on November 1st, 2014.

"I don't think it's as easy as one might hope to discover new nonprofits," said Chen. "Dollar A Day was trying to solve that problem first and foremost."

Personal Life

Perry Chen was listed by Fast Company as 74th in the ranking of "the most creative people in business" in 2010, along with fellow Kickstarter co-founders. Chen was also named as one of the "The 12 Most Disruptive Names In Business" by Forbes. Also in 2010, he was honored on the annual list of "100 most influential people" by Time.

Chen that was a TED Fellow in 2010, lives mostly in New York, but he says that his heart is in New Orleans, the place he was born and raised. After high school, Chen bounced between these two cities for the past years. In 2014, he was a resident of Laboratorio para la Ciudad in Mexico City.

Chen that describes his work "explores the intersection of technology and uncertainty", has made several projects in which are exhibited: Virus in 2001, The New Economy in 2001, Oscillation in 2013, Computers in Crisis in 2014, and LUNAR in 2014.

Chen resides in Bywater, New Orleans.