One afternoon, while on vacation in Florence at the end of 2014, Perry Chen flipped open his laptop and began to type some of the thoughts swirling in his head. A year earlier he had stepped down as Kickstarter’s CEO and into the role of chairman. Since then, as the amount of unread emails in his inbox dwindled and the meetings on his calendar approached zero, Chen began to think at a higher level about his company’s purpose.
During that year Chen also got back to his roots, the type of life that had inspired him to launch Kickstarter. For the first decade of his career, he had been an artist and musician; then he took crowdfunding to the next level—work that would earn him a spot on Time’s 100 Most Influential People List in 2013—and he was suddenly thrust into the life of a CEO. For five years he spent nearly every hour of the day putting out fires and doing his best to keep his head above water as the company entered a phase of hypergrowth. As the high-profile chief of a booming company, he repeatedly told employees that Kickstarter should exist for generations. But now that he wasn’t so wrapped up in the day-to-day operations, he decided to ask the question of why.
In Florence, he began to write words that would eventually serve as the foundation of the company’s new charter. In between hours spent relaxing with his sister and brother in-law’s family, Chen would come back to his Airbnb, open his laptop, and continue to edit his thoughts. After writing and rewriting for a month in a text editor, he copied the 1,000 words into an email and sent it to his cofounder, Yancey Strickler. Its subject line read: “existential kickstarter.”
Chen told me, “I wanted to ask myself, Why? People’s time is so precious. Yancey is putting his life blood into this. And the team. There has to be a purpose. Not everyone has that luxury—for some it’s just putting a roof over their head—but if it can be more, then let’s make it more.”
Over the next few months, the two cofounders had a series of long conversations and email threads about the future of Kickstarter. They both agreed that they had achieved the goals they initially set out to accomplish. The next stage of the company’s life should be about furthering the mission. They also agreed that they weren’t interested in continuing to exist for financial reasons; money had never been a huge motivation in the first place. Instead, they felt that the company should exist for two reasons: It should continue to innovate and build products that improved the lives of artists, and they should lead a new movement of corporate governance.
In the two years since Chen and Strickler had those conversations, Kickstarter has undergone a change that makes it unique in the technology industry. At the end of 2015, it announced that it would reincorporate from a C-Corp to a Public Benefit Corporation (PBC), vowing that it would never sell the company or go public. Both announcements were radical in the cutthroat world of Silicon Valley. In a world of “grow as fast as you can and then cash out,” Kickstarter took a defiant left turn.
Change Starts At Home
Today there are an estimated 5,000 benefit corporations in the U.S. (a tiny minority compared to the 1.7 million C-Corps), though that number is growing as idealistic millennials enter the entrepreneurial class. In 2015, Etsy became the first B-Corp certified company to go public. And in February this year, Laureate Education became the first benefit corporation to go public.