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Addictive Gifting: How Kickstarter, IndieGoGo and Kiva Turned Patronage into a Consumer Experience

Posted October 29th, 2010 in Giving, Social Capital | View Comments Screen shot 2010-10-29 at 8.00.01 AM

About a week ago, angel investor and Hunch cofounder Chris Dixon posted an incredibly insightful Tweet, noting that creative crowdfunding platform Kickstarter had turned patronage into a consumer experience. Having facilitated more than $20 million in pledges to artists, musicians and filmakers from more than 250,000 people, the site’s record is incredibly impressive. The question is: what is the social experience at work that makes this sort of micro-patronage so compelling for people?

One of the fibers in the current cultural milieu is a fascination with the science of happiness. After a century of belief in the power of stuff to make us happy, many Americans are, reasonably, feeling a little sold down the river. Much of the most quoted research suggests that when it comes to “buying happiness,” purchasing experiences (restaurants, vacations, etc) is a better bet than buying items. Fascinatingly, part of the additional benefit of experiences seems to be that we’re less likely to compare ourselves to others than if we’re buying things.

While the internet has enabled an incredible array of new purchasing options, one of the more interesting models that has emerged is crowdsourced funding for initiatives that would not otherwise not have a clear source of revenue. In the nonprofit space, Kiva has been the greatest success, facilitating more than $150 million in microcredit loans from average citizens to entrepreneurs in the developing world. In the last year, Kickstarter and IndieGoGo have applied the model to creative pursuits, giving artists, musicians and filmmakers a new way to engage their fan communities.

Yet for each of these successful platforms, there are a dozen that have flopped. What the successful companies share is an obsession with making their user experience addictive.

I think that there are 4 key elements of the addictive experience:

  1. Embracing the emotional reward of giving. The core reward for participation in these systems is the sheer joy of giving and enabling creation – whether its someones debut album or a new peanut shelling business that’s being created. The interface and features of these platforms are designed to amplify these rewards.
  2. Building social reciprocity into the system. Interestingly, these systems each have an element of reciprocity. When you make a Kiva loan, you actually get your money back when the entrepreneur returns the money to the lending institution. Kickstarter allows creators to offer rewards and prizes for different funding levels. The important thing to note is that this is not a transaction economy. People aren’t “buying” the gifts they get back. Instead, it is a system of social reciprocity that serves to reinforce the bond between the two actors.
  3. Creating urgency & momentum. Kickstarter projects have deadlines, status updates, and other features that give patrons on the site a sense of momentum. Kiva uses dramatic interface elements to give each loan the feeling of an urgent quest to enable an entrepreneur. These features increase the emotional stakes of participation for users in a way that significantly increases the ultimate reward for helping.
  4. Making it a team. Finally, these sites focus on making everyone involved feel like they are part of a team. Kickstarter becomes not about a person making something with a set of funders, but about an artist and their fans, struggling together to creative something wonderful. Kiva smashes through the divide between rich and poor by giving people a chance to work together to shape a new world. What’s more, it actually gives lenders the ability to organize together as teams which compete to loan the most. This whole is greater than the sum of its parts feel is a big part of the magic.

Even though our technology for social network is more dense than it’s ever been, I think we still underestimate how powerful social capital and the experience of giving can be. I believe that in the next few years, we’ll see a wave of services and web-based experiences that take advantage of the addictive potential of giving, and the entrepreneurs who get it right will have created not only instruments of commerce but instruments of culture and community.

Update: I just heard from folks at IndieGoGo that funders of projects on the sites have come from 134 different countries. Demonstration that the emotional and social reward of giving crosses borders.

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  • http://blog.assetmap.com Nathaniel Whittemore

    Just after sharing this post on Facebook, I noticed my friend Miki had linked to a new platform called Emphas.is that is trying to capture this same phenomena for international photo journalism.

    http://emphas.is/home.html

  • http://twitter.com/SaraJoyPond SaraJoyPond

    Very well put, Nathaniel.

    Another element I would add to your list is the idea of leveraging more than just financial capital. All of these platforms (and we here at http://TippingBucket.org) place equal or greater emphasis on the social capital community members can contribute. They make it easy for members to share projects/ideas they care about through the networks they already use, and reward them for doing so. That, we believe, has been key to their success.

  • http://blog.assetmap.com Nathaniel Whittemore

    That’s a good point – and I think probably, a high growth opportunity for new ventures. Catchafire and the Extraordinaries are two companies that are working hard and thinking creatively about how to enable people to leverage nonfinancial resources. One of the things that I think is important about both of those companies is that they’ve designed their services around particular theories of how to make the exchange of nonfinancial resources work well, rather than just letting it be a general marketplace.

  • http://www.blakejennelle.com Blake Jennelle

    Love the article Nathaniel. Another frontier in online giving is fun. When you think about offline giving, so much of it is centered around parties, events and performances. None of this experience has been translated online. At MyDunkTank, we think there’s a lot of innovation waiting to happen here.

  • http://twitter.com/nlw/status/29098719225 Nathaniel Whittemore

    Addictive Gifting: How Kickstarter and Kiva Turned Patronage into a Consumer Experience http://bit.ly/dldHyS (inspired by @cdixon)

  • http://twitter.com/developingjen/status/29099267044 Jenny Stefanotti

    The psychology of this utterly fascinates me @nlw How Kickstarter and Kiva Turned Patronage into a Consumer Experience http://bit.ly/dldHyS

  • http://twitter.com/merrybubbles/status/29099494912 Liva Judic

    Facinating psychology: @nlw on How Kickstarter and Kiva Turned Patronage into a Consumer Experience http://bit.ly/dldHyS via @developingjen

  • http://twitter.com/assetmap/status/29100040679 Assetmap

    Addictive Gifting: How Kickstarter Turned Patronage into a Consumer Experience http://bit.ly/dldHyS about @kickstarter, @kiva, @indiegogo

  • http://twitter.com/cdixon/status/29100204407 chris dixon

    RT @nlw Addictive Gifting: How Kickstarter and Kiva Turned Patronage into a Consumer Experience http://bit.ly/dldHyS

  • http://twitter.com/askingmatters/status/29100316876 Asking Matters

    RT @cdixon: RT @nlw Addictive Gifting: How Kickstarter and Kiva Turned Patronage into a Consumer Experience http://bit.ly/dldHyS

  • http://twitter.com/mecredis/status/29100356844 fred benenson 

    RT @cdixon: RT @nlw Addictive Gifting: How Kickstarter and Kiva Turned Patronage into a Consumer Experience http://bit.ly/dldHyS

  • http://twitter.com/anya1anya/status/29100408272 Anya Kamenetz

    RT @mecredis: RT @cdixon: RT @nlw Addictive Gifting: How Kickstarter and Kiva Turned Patronage into a Consumer Experience http://bit.ly/dldHyS

  • http://twitter.com/hornokplease/status/29100494258 Richard Nevins

    RT @cdixon: RT @nlw Addictive Gifting: How Kickstarter and Kiva Turned Patronage into a Consumer Experience http://bit.ly/dldHyS

  • http://twitter.com/socialentrprnr/status/29100578509 Nathaniel Whittemore

    Addictive Gifting: How Kickstarter, Kiva and IndieGoGo Turned Patronage into a Consumer Experience http://bit.ly/dldHyS

  • http://twitter.com/sriche/status/29100603017 Steve Richmond

    RT @cdixon: RT @nlw Addictive Gifting: How Kickstarter and Kiva Turned Patronage into a Consumer Experience http://bit.ly/dldHyS

  • http://twitter.com/mnacos/status/29100725461 Michael Nacos

    RT @cdixon: RT @nlw Addictive Gifting: How Kickstarter and Kiva Turned Patronage into a Consumer Experience http://bit.ly/dldHyS

  • http://twitter.com/swathyprithivi/status/29100943690 Swathy Prithivi

    @PresentBee's inspiration for social gifting – 'Addictive Gifting: Patronage as a Consumer Experience' http://bit.ly/dldHyS /via @cdixon

  • http://twitter.com/paconmiller/status/29101201056 paconmiller

    RT @developingjen: the psychology utterly fascinates me @nlw How Kickstarter & Kiva Turned Patronage into Consumer Exp http://bit.ly/dldHyS

  • http://twitter.com/gogoslava/status/29101787829 Slava Rubin

    RT @socialentrprnr: Addictive Gifting: How Kickstarter, Kiva and IndieGoGo Turned Patronage into a Consumer Experience http://bit.ly/dldHyS

  • http://twitter.com/gogoslava/status/29101787829 Slava Rubin

    RT @socialentrprnr: Addictive Gifting: How Kickstarter, Kiva and IndieGoGo Turned Patronage into a Consumer Experience http://bit.ly/dldHyS

  • http://twitter.com/mhoydich/status/29101810307 mhoydich

    For me, its the social reciprocity RT @cdixon RT @nlw How Kickstarter/Kiva Turned Patronage into a Consumer Experience http://bit.ly/dldHyS

  • http://twitter.com/tylerweaver/status/29101934743 Tyler Weaver

    RT @gogoslava: RT @socialentrprnr: Addictive Gifting: How Kickstarter, Kiva & IGG Turned Patronage into … Experience http://bit.ly/dldHyS

  • http://twitter.com/tylerweaver/status/29101934743 Tyler Weaver

    RT @gogoslava: RT @socialentrprnr: Addictive Gifting: How Kickstarter, Kiva & IGG Turned Patronage into … Experience http://bit.ly/dldHyS

  • http://twitter.com/kjmagee/status/29101976777 Joe Magee

    RT @socialentrprnr: Addictive Gifting: How Kickstarter, Kiva and IndieGoGo Turned Patronage into a Consumer Experience http://bit.ly/dldHyS

  • http://twitter.com/kjmagee/status/29101976777 Joe Magee

    RT @socialentrprnr: Addictive Gifting: How Kickstarter, Kiva and IndieGoGo Turned Patronage into a Consumer Experience http://bit.ly/dldHyS

  • http://twitter.com/synapticlight/status/29102035135 SynapticLight

    RT @tylerweaver: RT @gogoslava: RT @socialentrprnr: Addictive Gifting: How Kickstarter, Kiva & IGG Turned Patronage into … Experience http://bit.ly/dldHyS

  • http://twitter.com/synapticlight/status/29102035135 SynapticLight

    RT @tylerweaver: RT @gogoslava: RT @socialentrprnr: Addictive Gifting: How Kickstarter, Kiva & IGG Turned Patronage into … Experience http://bit.ly/dldHyS

  • http://twitter.com/jonfout/status/29102306518 Jonathan Nachum

    RT @mecredis: RT @cdixon: RT @nlw Addictive Gifting: How Kickstarter and Kiva Turned Patronage into a Consumer Experience http://bit.ly/dldHyS

  • http://twitter.com/jeffreymstern/status/29102453929 Jeff Stern

    RT @socialentrprnr: Addictive Gifting: How Kickstarter, Kiva and IndieGoGo Turned Patronage into a Consumer Experience http://bit.ly/dldHyS

  • http://twitter.com/tippingbucket/status/29102980383 The Tipping Bucket

    RT @socialentrprnr: Addictive Gifting: How Kickstarter, Kiva and IndieGoGo Turned Patronage into a Consumer Experience http://bit.ly/dldHyS

  • http://twitter.com/sarajoypond/status/29102983552 SaraJoyPond

    RT @socialentrprnr: Addictive Gifting: How Kickstarter, Kiva and IndieGoGo Turned Patronage into a Consumer Experience http://bit.ly/dldHyS

  • http://twitter.com/drskc/status/29103758845 Keith Collins

    RT @cdixon: RT @nlw Addictive Gifting: How Kickstarter and Kiva Turned Patronage into a Consumer Experience http://bit.ly/dldHyS

  • http://twitter.com/wamboo/status/29103790264 Dori Gehling

    When addictive gifting is the consumer experience: http://bit.ly/dmlSaH by @nlw . Wamboo will be there very soon!… http://fb.me/JPKfXtMw

  • http://twitter.com/bwertz/status/29103917692 Boris Wertz

    Addictive Gifting: How Kickstarter and Kiva Turned Patronage into a Consumer Experience http://bit.ly/9Paq5v (via @summify from @cdixon)

  • http://twitter.com/mdanys/status/29106734262 mdanys

    RT @socialentrprnr: Addictive Gifting: How Kickstarter, Kiva and IndieGoGo Turned Patronage into a Consumer Experience http://bit.ly/dldHyS

  • http://twitter.com/weiks/status/29107280286 Michael Weiksner

    "Addictive Gifting: How Kickstarter, IndieGoGo and Kiva Turned Patronage into a Consumer Experience" http://ow.ly/31BfU Nice!

  • http://twitter.com/vlaskovits/status/29107874366 Patrick Vlaskovits

    RT @cdixon: RT @nlw Addictive Gifting: How Kickstarter and Kiva Turned Patronage into a Consumer Experience http://bit.ly/dldHyS

  • http://twitter.com/uxfeeder/status/29115298234 UX Feeder

    Delicious: Addictive Gifting: How Kickstarter, IndieGoGo and Kiva Turned Patronage into a Consumer Experience … http://bit.ly/dy9vCJ [UX]

  • http://twitter.com/uxfeeds/status/29115401908 UXfeeds

    Addictive Gifting: How Kickstarter, IndieGoGo and Kiva Turned Patronage into a Consumer Experience | Assetmap: … http://bit.ly/dy9vCJ #ux

  • http://twitter.com/memeticbrand/status/29116474259 Michael Cayley

    RT @uxfeeds: Addictive Gifting: How Kickstarter, IndieGoGo and Kiva Turned Patronage into a Consumer Experience | Assetmap: … http://bit.ly/dy9vCJ #ux

  • http://twitter.com/michaelcayley/status/29116473314 Michael Cayley

    RT @uxfeeds: Addictive Gifting: How Kickstarter, IndieGoGo and Kiva Turned Patronage into a Consumer Experience | Assetmap: … http://bit.ly/dy9vCJ #ux

  • http://twitter.com/edwardharran/status/29123776908 Edward Harran

    RT @nlw Addictive Gifting: How Kickstarter and Kiva Turned Patronage into a Consumer Experience http://bit.ly/dldHyS

  • http://twitter.com/corporatemama/status/29124313787 Corporate Mama

    Addictive Gifting: How Kickstarter, IndieGoGo and Kiva Turned Patronage into a Consumer Experience | Assetmap http://ht.ly/31JAg

  • http://twitter.com/gert_s/status/29128334309 Gert Steens

    Hi-Precision BizModelDesign RT @socialentrprnr Kickstarter/Kiva/IndieGoGo Turn Patronage into Consumr Experience http://bit.ly/dldHyS #bmgen

  • http://twitter.com/brianccarroll/status/29177855030 Brian Carroll

    RT @socialentrprnr: Addictive Gifting: How Kickstarter, Kiva and IndieGoGo Turned Patronage into a Consumer Experience http://bit.ly/dldHyS

  • http://peerbackers.com Sally Outlaw

    We just launched an crowdfunding site specifically to help entrepreneurs since kickstarter and IndiGoGo are focused mostly on artists and creative endeavors. Check us out if you need funding! http://peerbackers.com

  • http://twitter.com/nlw/status/29192089040 Nathaniel Whittemore

    Just a little saturday reading- Addictive Gifting Patronage Became a Consumer Experience http://bit.ly/dldHyS

  • http://twitter.com/brianoberkirch/status/29192700070 Brian Oberkirch

    Kiva, Kickstarter and the experience of giving. (via @mathowie) http://bit.ly/c3U8GJ

  • http://twitter.com/monstro/status/29194297346 Lane Becker

    RT @brianoberkirch: Kiva, Kickstarter and the experience of giving. (via @mathowie) http://bit.ly/c3U8GJ

  • http://twitter.com/melthel/status/29202902165 Melissa Thelemaque

    How #Kickstarter, #IndieGoGo & #Kiva Turned Patronage into a Consumer Experience: http://bit.ly/ad0X5b @yalechk

  • http://twitter.com/believeactgo/status/29214406143 Kim Lampe

    RT @assetmap: Addictive Gifting: How Kickstarter, IndieGoGo and Kiva Turned Patronage into a Consumer Experience http://bit.ly/dldHyS

  • http://twitter.com/discoveryourbag/status/29214427632 Kim Lampe

    RT @assetmap: Addictive Gifting: How Kickstarter, IndieGoGo and Kiva Turned Patronage into a Consumer Experience http://bit.ly/dldHyS

  • http://twitter.com/sebpaquet/status/29238889456 Seb Paquet

    RT @assetmap: Addictive Gifting: How Kickstarter, IndieGoGo and Kiva Turned Patronage into a Consumer Experience http://bit.ly/dldHyS

  • http://twitter.com/memeticbrand/status/29335906538 Michael Cayley

    RT @Gert_S: Hi-Precision BizModelDesign RT @socialentrprnr Kickstarter/Kiva/IndieGoGo Turn Patronage into Consumr Experience http://bit.ly/dldHyS #bmgen

  • http://twitter.com/katka_s/status/29391222012 Katya Skorobogatova
  • http://twitter.com/venessamiemis/status/29460826682 Venessa Miemis

    Addictive Gifting: How Kickstarter, IndieGoGo and Kiva Turned Patronage into a Consumer Experience http://bit.ly/dbTcDt

  • http://twitter.com/matristerra/status/29462071343 Clare Cunningham

    RT @VenessaMiemis: Addictive Gifting: How Kickstarter, IndieGoGo and Kiva Turned Patronage into a Consumer Experience http://bit.ly/dbTcDt

  • http://twitter.com/doingsomegood/status/29462916332 Doing Something Good

    RT @VenessaMiemis: Addictive Gifting: How Kickstarter, IndieGoGo & Kiva Turned Patronage into an Experience http://bit.ly/dbTcDt @FundBreak

  • http://twitter.com/davidahood/status/29462917989 David Hood

    RT @VenessaMiemis: Addictive Gifting: How Kickstarter, IndieGoGo & Kiva Turned Patronage into an Experience http://bit.ly/dbTcDt @FundBreak

  • http://twitter.com/klaitner/status/29467275623 Kurt Laitner

    RT @VenessaMiemis: Addictive Gifting: How Kickstarter, IndieGoGo and Kiva Turned Patronage into a Consumer Experience http://bit.ly/dbTcDt

  • http://twitter.com/elkinssocvest/status/29503986727 Amy Elkins

    Addictive Gifting: How Kickstarter, IndieGoGo and Kiva Turned Patronage into a Consumer Experience http://bit.ly/dldHyS cc: @adamsocvest

  • http://twitter.com/toniodesorrento/status/785484183769088 Tonio DeSorrento

    Four key elements to crowdfunding experience @nlw: http://bit.ly/dbTcDt. Analysis is of donation model, but could same be commercialized?

  • http://twitter.com/gallizio/status/832190850015232 gallizio

    RT @assetmap: Addictive Gifting: How Kickstarter, IndieGoGo and Kiva Turned Patronage into a Consumer Experience http://bit.ly/dldHyS

  • http://twitter.com/variable_edge/status/1030476940709888 the bleedingEDGE

    How Kickstarter, IndieGoGo and Kiva created a Consumer Experience … and what we can learn. http://bit.ly/dbTcDt via @VenessaMiemis

  • http://twitter.com/adamarisilver/status/1636539171872768 Adam Silver

    RT @assetmap: Addictive Gifting: How Kickstarter, IndieGoGo and Kiva Turned Patronage into a Consumer Experience http://bit.ly/dldHyS

  • http://twitter.com/kevindoylejones/status/1733817702293505 Kevindoylejones

    "addictive" giving. hi, im john, im a giving addict. hi john. http://bit.ly/9BxRbx

  • http://twitter.com/richpanderson/status/1735183271206912 Rich Anderson

    RT @Kevindoylejones: "addictive" giving. hi, im john, im a giving addict. hi john. http://bit.ly/9BxRbx

  • http://twitter.com/lindamicciche/status/1736553227362304 lindamicciche

    RT @Kevindoylejones: "addictive" giving. hi, im john, im a giving addict. hi john. http://bit.ly/9BxRbx

  • http://twitter.com/thehubla/status/1760890508546048 The HUB LA

    Addictive Giving: How Kickstarter, IndieGoGo and Kiva Turned Patronage into a Consumer Experience http://ht.ly/36qp3

  • http://twitter.com/hubatl/status/1764896500883457 HUB Atlanta

    RT @TheHubLA: Addictive Giving: How Kickstarter, IndieGoGo and Kiva Turned Patronage into a Consumer Experience http://ht.ly/36qp3

  • http://twitter.com/boldspace/status/1766602877968384 BOLDspace

    RT @TheHubLA: Addictive Giving: How Kickstarter, IndieGoGo and Kiva Turned Patronage into a Consumer Experience http://ht.ly/36qp3

  • http://twitter.com/horacioathome/status/1793904819044352 Horacio Coutiño

    RT @TheHubLA: Addictive Giving: How Kickstarter, IndieGoGo and Kiva Turned Patronage into a Consumer Experience http://ht.ly/36qp3

  • http://twitter.com/jointhehoop/status/2054288310272000 The Hoop

    RT @assetmap: Addictive Gifting: How Kickstarter, IndieGoGo and Kiva Turned Patronage into a Consumer Experience http://bit.ly/dldHyS

  • http://twitter.com/coalitionfilm/status/2087947587297280 Simon Robson

    Crowdfunding and consumer patronage: lessons from Kickstarter, Kiva, and IndieGogo. RT openkollab http://fb.me/tZGUFgM6

  • http://twitter.com/p2173/status/2227361311358978 Lucy Bernholz

    RT @assetmap: Addictive Gifting: How Kickstarter, IndieGoGo and Kiva Turned Patronage into a Consumer Experience http://bit.ly/dldHyS @myen

  • http://twitter.com/cocoxochitl/status/2425269553987585 Mud Baron

    RT @p2173: RT @assetmap: Addictive Gifting: How Kickstarter, IndieGoGo &Kiva Turned Patronage in2 a Consumer Experience http://bit.ly/dldHyS

  • http://twitter.com/andiskinner/status/2818177545277440 Andrea Skinner

    Supercool- crowdsourced funding for various initiatives. http://bit.ly/dldHyS

  • http://twitter.com/memeticbrand/status/2916125520166912 Michael Cayley

    RT @AndiSkinner: Supercool- crowdsourced funding for various initiatives. http://bit.ly/dldHyS

  • http://twitter.com/socialspace/status/2917890806259712 Andrew Long

    RT @AndiSkinner: Supercool- crowdsourced funding for various initiatives. http://bit.ly/dldHyS

  • http://twitter.com/cocoxochitl/status/3152616737476609 Mud Baron

    RT @p2173: RT @assetmap: Addictive Gifting: How Kickstarter, IndieGoGo &Kiva Turned Patronage in2 a Consumer Experience http://bit.ly/dldHyS

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  • http://twitter.com/danielweinmann/status/7567257475481600 Daniel Weinmann

    RT @assetmap: Addictive Gifting: How Kickstarter, IndieGoGo and Kiva Turned Patronage into a Consumer Experience http://bit.ly/dldHyS

  • http://twitter.com/bitesandbeats/status/9869393584459776 BITESandBEATS

    Addictive Gifting: How Kickstarter, Kiva & IndieGoGo Turned Patronage into a Consumer Experience http://bit.ly/dldHyS (via @socialentrprnr)

  • Marie

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    http://www.impulso.org.br

  • http://twitter.com/brookeestin/status/11244782189813760 brookeestin

    Addictive Gifting: How Kickstarter, IndieGoGo & Kiva Turned Patronage into a Consumer UX http://bit.ly/dldHyS

  • http://twitter.com/altruja Altruja

    Interesting stuff!
    Especially great to see, that this is an international development.
    We at http://www.Altruja.com are bit more focused on integrated solutions rather than creating another portal.
    Looking forward to new innovations here.

  • http://twitter.com/lindieve/status/26003221910650880 Eve Lindi

    Happy to have found @assetmap, brainfood on Addictive Gifting http://bit.ly/dldHyS – looking forward to more!

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