The Kickstarter Economy: 29,600 Jobs and $5.3 Billion In Economic Activity

More successful than previously reported. JL

Kerry Flynn reports in Mashable:

In six years, Kickstarter has helped employ 283,000 part-time collaborators and has created an estimated 8,800 companies and nonprofits and 29,600 full-time jobs. Every dollar pledged to a successfully-funded project garnered $2.46 in additional revenue for the creator. Of the 8,800 organizations created through Kickstarter, 82 percent still operate.
Palmer Luckey did not storm into Mark Zuckerberg's office to pitch the innovation that is now steering Facebook's future. First, he took to Kickstarter.

The crowdfunding tool helped him secure $2.4 million. He built a device and a company that would later attract Zuck's attention and $2 billion. Oculus now employs more than 400 people and is selling its first consumer virtual reality headset.
The story of Oculus is just one of the many success stories on Kickstarter. Not every project reaches a multibillion-dollar valuation, but they do each generate or lose funds.
Earlier this month, Ethan Mollick, an assistant professor of management at the Wharton School of Business, released the first-ever comprehensive study on the economic impact of Kickstarter. Every dollar pledged to a successfully-funded project garnered $2.46 in additional revenue for the creator. That leads to an estimated $5.3 billion in economic activity, Mollick found.
In the six years studied by the reporter, Kickstarter has helped employ 283,000 part-time collaborators and has created an estimated 8,800 companies and nonprofits and 29,600 full-time jobs.
"The kinds of outcomes achieved in crowdfunding are extremely diverse, meaning that there are many impacts, from jobs to awards to achieving dreams," Mollick told Mashable.
Mollick sent online surveys to 65,326 creators who had raised more than $1,000 on Kickstarter before May 2015 as well as a selection of those who had raised below that amount. He also surveyed between 7 and 10 backers for the majority of the projects.
He found that 37 percent of respondents said their
said their Kickstarter projects helped advance their careers, and 19 percent reported that they found a new job opportunity after launching.

With Kickstarter, Luckey landed himself a job at Facebook. Other Kickstarter creators have kept running their businesses independently. For instance, Debbie Sterling runs GoldieBlox, games designed to inspire interest in engineering, with about 25 employees based in Oakland, California.
For every 1,000 Kickstarter projects that have been successfully funded, 190 founders work alongside 82 full-time employees, Mollick found.
Not every project leads to a career or a company, and successful projects also face growing pains in the industry. Smartwatch maker Pebble Technology Corp., which started on Kickstarter, recently cut 40 jobs, laying off a quarter of its staff, Tech Insider reported.
Still, despite the attention around failed Kickstarter campaigns, the failure rate is about 9 percent while success rate is 91 percent, according to Mollick's research. Of the 8,800 organizations created through Kickstarter, 82 percent still operate.
"Failure was reasonably rare, but still prevalent. Projects do fail, but not at an excessive rate," Mollick said. "You can’t easily predict which projects will fail in advance."
This latest study shows that crowdfunding generates revenue and spurs new jobs, but there's more research to be done into the disparity in funding. While Silicon Valley venture capitalists are criticized for not funding women or minorities as often as white men, Kickstarter creators also can face barriers despite the platform's openness.
Putting numbers to such disparity is Mollick's next step.
"I want to understand how we can democratize innovation and entrepreneurship and that starts by finding out how we can overcome the biases that prevent many people from pursuing their innovations," he said.