DUBLIN -- The technology startup scene today is a land of unicorns where big money talks and not much else matters. It's a place where the first question investors ask is: "What is your exit strategy?" The focus is on big valuations, big funding rounds and big burn rates.
Is there a better, more sustainable way to run a business?
Kickstarter CEO Yancey Strickler says there is. He's the co-founder of one of the hottest tech startups of recent years -- small and large individual investors have used the Kickstarter platform to fund more than 90,000 projects since it began operations in Brooklyn, New York, in 2009 -- but he isn't your typical tech chieftain. He claims he doesn't believe that running a company should be about getting rich and buying boats.
Recently, Strickler and Kickstarter's shareholders made the decision to become a public benefit corporation (PBC), which allows the company to remain a for-profit entity while management is obligated to think about the wider impact of its decisions on society. “You are not just focused on your bottom line; you put equal weight on how others are affected by what you do,” Strickler said during a talk at Web Summit in Dublin.
An example of this is how Kickstarter has publicly declared it will not use any tax loopholes "or other esoteric-but-legal tax management strategies" to reduce its tax bill. In a similar way, clothing company Patagonia -- one of the first public benefit corporations -- has pledged to share proprietary information with competitors if it will help the environment.
Speaking to International Business Times after his talk, Strickler said he's not trying to dictate how things should be; rather, he wants to show that a business can take an alternative path to simply trying to make more money. "I am arguing against a monoculture. I don’t just want a different monoculture that’s mine, I think you want a polyculture. I am not going to tell someone else how to run their life."
Every employee who works at Kickstarter gets a company handbook, at the end of which is the motto "F--- the monoculture."
Locking In Idealism
"[Becoming a PBC] is available to any entrepreneur," Strickler says. “Right from the beginning you can lock in that idealism that helped you start your company, that is motivating you now, and make sure it is a part of your organization for all time. Every giant company started as a small company, but at some point they lose their soul, and we want to try and prevent that.”
For Kickstarter, this is set out in the company's new charter, which declares that 5 percent of all its profits will be to pledged to arts and music programs for children and young adults, with a primary focus on underserved communities in New York City.
The company has also pledged not to lobby or campaign for public policies unless they "align with its mission and values, regardless of possible economic benefits to the company."
Kickstarter of course was once one of these startups seeking venture capital, but Strickler says if you are open and honest with those looking to invest, then it shouldn't be a problem when you want to choose a different path. This resulted in Kickstarter -- which has raised over $2 billion for a huge variety of campaigns -- being able to change its corporate structure with little dissent from shareholders.
The monoculture pervades all aspects of modern life. From the chain stores dominating every high street in the country to the consolidation of the music industry into three big labels and the sequel and prequel-driven film industry. This "hedge fund mentality but with better branding" as Strickler calls it, has resulted in a "money monoculture."
"I see something that is having an impact across all of society," Strickler says. "And that is a money monoculture -- just money trying to make money. What this tends to do is that it erases culture, it erases everything else and reduces everything to a single bottom line.”
Is Kickstarter out of touch with business realities? "I don’t know if it could become the norm, but I think there could be other models," Strickler tells IBT. "I’m not arguing for some single model to rule them all. I’m just arguing for an entrepreneur, an artist, to have a lot of different choices about how they go about setting up their business and just how they operate."
Go To War
The cover of the Harvard Business Review last month screamed that the "new rules of competition" included "Be paranoid, disrupt yourself and go to war for talent." Many take these words as gospel in a world where winning is everything. Indeed, when Strickler stepped up to become CEO of Kickstarter two years ago, even he felt the pressure: "When I first stepped into [the CEO] seat, I felt the weight of the company on my shoulders and I also felt the noise of this kind of stuff and it really made me question who I am, made me ask, 'Do I need to be this person to succeed, to be more aggressive, to be more ruthless than the next guy?'”
The bespectacled Strickler is an engaging and enthusiastic proponent for choosing a different path.
Going this route may mean a company does not become the next Apple or Google, but according to Strickler, it could make you a whole lot happier. "If you follow this through, you get the ultimate product-market fit. This is where your product, your community and a broader society are all aligned around the goals of your business.”
Strickler likes to cite the example of Fugazi, a hardcore heavy metal band that has shunned the music industry to do it their own way, playing $5 gigs for all ages, running their own record label and charging $10 for an album. Despite this alternative approach, Fugazi has been operating successfully as a business for almost 30 years and waves the flag for an alternative way of running a company. "This is what you should seek. This is happiness, this is health," says Strickler.