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Kickstarter co-founder Perry Chen’s advice to startup founders and investors: Don’t lie to each other

“It will always come back to bite you.”

Kickstarter co-founder Perry Chen
Kickstarter co-founder Perry Chen at the 2016 Time 100 Gala on April 26, 2016 in New York City.
Taylor Hill/FilmMagic

Ten years ago, Perry Chen and his co-founders, Charles Adler and Yancey Strickler, started the crowdfunding platform Kickstarter for one reason: “This should exist.”

And from the beginning, Chen says he knew that Kickstarter’s raison d’etre was not to make anyone rich through an acquisition or IPO. As a private company that’s also a public benefit corporation, it sits somewhere closer to a mission-driven nonprofit than an “eat-the-world sociopathic for-profit” entity, Chen said on the latest episode of Recode Media with Peter Kafka.

And crucially, Chen told all this to his investors from the jump, such as Union Square Ventures’ Fred Wilson — who has otherwise invested in several “eat-the-world” wannabes like Twitter, Tumblr, and Zynga.

“You get married to your investors, and I think that’s a really important kind of way to talk about it, because I think often it’s easy to focus from the investor’s perspective and the entrepreneur’s perspective, or whoever they’re talking with, the CEO, on getting the deal done,” Chen said, adding “I think with Fred and other investors at the time that, you know, also invested in kind of more classic startups, I think my approach was just tell them how it is.”

He noted that although Wilson has helped Kickstarter for almost its entire life, his firm Union Square does not have a fixed seat on the board — meaning, if Wilson decides to cash out, he won’t necessarily replaced by a more bloodthirsty colleague. Chen advised that founders should get conditions like that written out in ironclad documents, but that great damage can still be wrought by the “convenient” lies and half-truths that founders and their investors sometimes swap.

“It will always come back to bite you,” he said. “Just in the same way it would in a romantic relationship, as well.”

You can listen to Recode Media wherever you get your podcasts — including Apple Podcasts, Spotify, Google Podcasts, Pocket Casts, and Overcast.

Below, we’ve shared a lightly edited full transcript of Peter’s conversation with Perry.


Peter Kafka: This is Recode Media with Peter Kafka, that is, me I’m talking to you today from Vox Media Headquarters in New York City. Perry Chen is drinking coffee. Perry, why don’t you give me your title at Kickstarter?

Perry Chen: Sure. I’m founder and chairman, I served as CEO a couple times, probably about six years of our 10 years in total.

You were most recently CEO until a couple weeks ago, is that right?

Yeah, I think maybe it’s about a month at this point, but yeah.

Yeah, and depending on when you listen to this, Kickstarter has just turned 10 years old.

Yes. Yes, very, I think exciting? I mean it is exciting, it’s also just 10 years is so long, it’s hard to believe.

It’s a weird company because it is both a noun, right? In the same way that Kleenex or Xerox is a noun. Everyone sort of knows what Kickstarter is, even if they can’t identify you or the company, they know it’s crowdfunding.

Also, weirdly for a well-known, well-established internet company, you guys are pretty quiet, not accused of throwing an election for Donald Trump or undermining democracy or being a haven for Nazis or running weird misinformation campaigns, so congratulations on that. More positively, you’ve generated what, four-plus billion for various projects?

Yeah, I think that sounds right.

That’s an astonishing number.

Thank you. What’s really interesting is a couple years ago there was an economic impact report done by a UPenn researcher and it talked about how the secondary effects of the money raised in the projects on Kickstarter was I think an additional... I hate to get this wrong, but it’s like, you can do 2.5x of the money raised for the trickle-down impact.

So, raise X money for this project and then that project then employs these people or ...

That’s right.

It generates this much more commerce.

So you go out in the world and you spend ... the $4 billion is spent on putting a film together, make a book, designing a thing, and that in turn creates this kind of economic impact, including the creation of organizations, part-time and full-time jobs, hundreds of thousands.

So, it’s pretty amazing. It’s not, you know, at our heart and soul, our primary thing is that these projects exist in the world and they have this kind of qualitative effect on people, right? What is it to go see a film, what is it to go see and like have an object that makes you think, like all these things. But the secondary stuff is real and we appreciate it, and it’s something ... again, we didn’t anticipate it. It just kind of, what we learn is what occurs.

Yeah, I want to talk a little bit about how you started and what you were thinking about this when you started. Everyone has a founding myth, basically, for their company. Some of them are made up. Hoping yours is accurate. It’s you had this idea, you’re in New Orleans in 2001, you’re doing music and you had this idea for a crowdfunding thing. Then it takes you eight years more to actually launch it. You’re not calling this a crowdfunding idea, right?

No, it’s gotta be at least a decade before that term existed. Maybe not, but better part of a decade.

So, your thought was, “I wish there was a thing on the internet that helped me raise money to do a thing”?

Well, you know, I think a lot of the ideas that really work tend to be the kind of, where they come from scratching the person’s own itch, who begins the journey. And so for me, I was living in New Orleans, I was probably, I don’t know, mid-20s or so, maybe early 20s, and I wanted to throw a concert, but during the Jazz Fest in New Orleans, which is obviously one of the biggest events of the year.

Not in the official capacity, but there’s all these hundreds of little concerts that happen around it during the two weeks of the Jazz Fest. So, I wanted to do that. I wasn’t a music promoter. I was just a DJ and a musician. I loved music and I wanted to bring these artists in from Austria. I thought it’d be a great event. However, the costs were going to be high.

Because you’ve got to put them on an airplane.

I think it was about 15,000 bucks or something all in with the venue. And I did some of my legwork and I realized, I talked to the venue, but at the end of the day I was like, yeah, I don’t think I can do this.

I can’t front this.

Yeah. I can’t. Or if I do, this is just like everything. It’s just like it’s all ... you know. What really bothered me was I was like, I think the artists would really enjoy it, getting an opportunity to come to New Orleans, experience Jazz Fest. Some of their music had been influenced by New Orleans music, even though it was electronic.

I think the audience would really like it, seeing like the lineage of kind of New Orleans music and then going to late-night events and seeing how more contemporary ways it’s being used and twisted and so I thought it would work. However, I just couldn’t take the risk.

And was this always going to be an internet idea? Because 2001 is post-internet boom, but the internet is still there. Internet hasn’t gone away, but the idea of making businesses on the internet has gone away temporarily.

Right. And I didn’t necessary ... I wasn’t so aware of this, right? I wasn’t really working ... you know, I never worked in the internet space prior. So for me, I was just thinking about could this exist online, or this should exist online.

And then, as you say, it’s a different era. This is pre-social media in the way we have it now. This is MySpace and pre-YouTube and pre video being so ubiquitous, certainly user-generated video. So, in my mind, you have to imagine, the thing I’m jumping off of is eBay, right? Like a listing-based service, probably photo-driven, copy-driven.

Craigslist-y.

Yeah, like somewhere between those two things, right? With this kind of mechanism of funding. So, that’s really the birth of it and it was only in the eight years it took that all these things arose.

And when did you decide this moves from “this would be a cool thing for me to have, or this would be a cool thing for me to enable the next Jazz Fest concert I want to run” to “this is a business that I want to do. This is a business that I want to run and spent all my time working on?”

For me, the way it sat was, this is a thing that should exist. I had no inclination to start a business. As I said, I was working in New Orleans, I was working in music. For me, I’m like, that’s what you do after you grind for 40, 50 years and maybe if you can make it happen. I was living that life at that point, you know, I didn’t have a ton of money but it’s like, why would I go off and do something for a long time that’s really, really hard and ultimately probably to come back there…

I’m already living the life that I want to live when I’m 50.

I’m living the life that I want to live and I found my peace, you know? It doesn’t involve a lot of money. And so really what drove me ultimately, and part of why I took a while, was I thought it was a good idea, but I had to see why it would be something I would do. And it was only because really understanding that this is just not my problem, but all of my fellow artists’ and creators’ problem, which is that it’s hard to get funding for things.

So, it became bigger than just, “Hey I would like this to exist.” It became, “This could really be an important piece.”

So, flash forward to 2009, you picked up two co-founders, a little bit of funding. I was listening to an interview you did the other day. You had David Cross as an initial backer?

Yes, David Cross from Arrested Development and many other things, Mr. Show.

Mr. Show!

Mr. Show.

I love that David Cross is your seed money.

He was our first investor. Yeah.

And I remember seeing you guys sort of around.

He’s the hidden force behind the technology build.

It’s fantastic, I love it. Because I think he’s off the internet again, he was on for a while. I remember seeing you guys around New York startup land and sort of there’s a class of New York startups, Tumblr, Etsy, Foursquare ...

I think that would be an interesting retrospective, of that cohort. I really think right now is an incredible time to kind of look back at that.

I was just talking to Dennis Crowley about that.

Right. Foursquare, Tumblr, Etsy, Meetup.

Yeah. I think of Twitter as in New York.

Really?

It’s not, obviously, but it’s just because there were so many people on the investment side, Union Square and those guys were always sort of hanging out in New York. I think of them sort of in that class, even though San Francisco gets to claim them.

Hmm.

And all of those were, well, they’re all different stories. David Karp was doing this thing as a project for high school. So, when you guys get around to, “Okay, now we’ve got some real money, we’re actually launching this site” … If we flash all the way forward to now, you guys are a public benefit corporation. We’ll talk about that. You’re mission driven, you’re a for-profit company, but you’re different than your sort of standard internet company.

Was that clear in your head in 2009 that we’re going to do this, but it’s going to be sort of a different take on capitalism than a standard internet company would be?

Not in the... like, so, yes in terms of ultimately how we were going to make decisions. No in terms of the deep understanding of the law and the corporate structures and the mechanisms that would be required. So, even when we raised money, we told our investors that we’re not going to profit maximize, we’re not gonna just do whatever it is to make money, we’re not gonna ... we don’t want to go public, we don’t want to sell the company. So, all these things which were really about mission primacy, you know, I think even terms like mission-focused, which we use and are kind of almost ... they don’t serve really what it is well.

I think it’s real easy for people to understand nonprofits, the Greenpeaces, the ACLUs of the world. They understand their mission primacy, the environment, the First Amendment. I think when we get to kind of like the space we’re in, which is kind of, in the binary world of eat-the-world sociopathic for-profit and fully not nonprofit, sitting in the middle, in a way. It’s, do people interpret when you say mission like a for-profit, which is like, just some stuff we write on the wall to convince everybody that they’re actually doing something positive, or as a nonprofit, which is literally that’s why they exist.

It is definitely like a nonprofit. That’s why we exist, full stop.

And you knew that going in?

Yeah, because I had no interest in working at a technology company.

So, when you’re talking to someone like a Fred Wilson from Union Square who does a lot of interesting stuff but is very much focused on getting returns, it’s his job, and again that class of internet startups he’s in has been amazing.

Of course.

When you had that conversation with Fred Wilson to say, “We’re never going to sell this company, we’re never going to go public,” i.e. it’s going to be very difficult for you to make money on this investment, how does that conversation go?

Yeah, I mean, I think that I’ve always found that, you know, people have said before, you get married to your investors, and I think that’s a really important kind of way to talk about it, because I think often it’s easy to focus from the investor’s perspective and the entrepreneur’s perspective, or whoever they’re talking with, the CEO, on getting the deal done.

But the thing is, you’re going to work with these people for a very long time and, if you tell each other things that aren’t true, convenient lies often, or convenient half-truths, like, “We trust the entrepreneur,” or “Don’t worry, I want this to be super, super, super big,” just to get the deal signed and move on, it will always come back to bite you. Just in the same way it would in a romantic relationship as well.

So, I think with Fred and other investors at the time that, you know, also invested in kind of more classic startups, I think my approach was just tell them how it is. Tell them how you plan to make decisions and then if there’s a way it can work for them, then you can move to the next stage of conversation, which is to try to understand, is that true?

Because I’m wondering if they had the same conversations with the Twitters and Etsys of the world, and those are companies where I think Fred Wilson has publicly said, “Yeah, I had to fire the CEO.” I think he said he had blood on his hands once, which is about firing Jack Dorsey years ago. I can’t remember who he “killed.” The point is, I’m sure he had meaningful and deep conversations with lots of folks and in the end there’s a decision about we need to push this founder out …

100 percent.

Or we need to get a return, we need to sell. You’re from the get-go saying, “I’m not into that.”

Yeah, I think that there’s a ... I would encourage entrepreneurs to think about, there are three factors that you have to think about. Okay, one is, it’s not just the paper, it’s not just the contracts, right? It’s also like, you’re in a conversation with a person, so are you being upfront with them? Are you being ethical, telling them what you plan, letting them make the decision and choosing open eyes to go into this arrangement with you? Meaning that later, I believe you have the moral authority than if they’re coming at you, “Hey, I don’t know my LPs,” you can say, “Look, that’s not what you told me.” That’s just one.

Now, the other thing too, is you remember that this person is also just playing a role, right? Somebody else could be sitting in that seat representing the fund or the family or the institution. If you’re a nonprofit, it could be MacArthur. Look, different people could be sitting in those seats representing their role and they may not share the opinions of the people that were there that made the deal. And that’s actually appropriate.

So, you also want to make sure, okay, contractually, really, when you get down to this ...

I want to protect myself if you get hit by a truck or you quit or whatever.

Yeah, what’s the legal relation?

Right.

What’s the contractual relation? So you want the kind of ethical, moral, we’ve laid out our truths, we’ve agreed here. The second is that contractually, even if it’s not you ...

Right, I’ve looked you in the eye and we’ve made a deal and then we’re also going to have a contract that protects me if you’re no longer here.

Sure. Exactly, and I think both ways: It should protect you that I’m also living up to the way I’ve positioned it.

Yeah.

I don’t love the investor as boogeyman kind of thing, because I think we’re all the boogeyman. So, what’s the third one?

You can come back to it. I do think that’s interesting, what you said about the investor being the bogeyman, because it’s come up in sort of media discussions the last few years, like, “Oh it’s the venture capitalists’ fault that these media companies aren’t succeeding.”

Yeah.

“They put too much money in,” or, “They put too much pressure on it,” or, “They forced them to sell.”

Right.

And from what I can tell, I think at least half of that is wrong, and at a minimum, the people who are running the companies need to bear at least half the blame.

The third thing I do recall, and at first I want to say I totally agree with what you’re saying, it’s to be shared, you know, and I think it’s a really good conversation to have. I think the third thing is like, what is it that you’re ultimately doing a deal with? So, there’s so many different types of investors. There’s the individual that can invest in whatever they want.

Yup.

It’s their money. However, there’s people who represent institutions and funds and their representatives so you want to understand what is this thing that is ultimately giving the money that I’m making the deal with. So you need, in this instance, to understand, say, what is Union Square, right? What is the arrangement they have with their LPs, their investors?

Right, who are their LPs? Oh, they’re pension funds, which means ...

Yeah, or even just that, what is the auspices of the relationship with the fund? What have they promised them? What are the returns they promised them? What are the rules that they’re going to operate to, whether it’s Fred or somebody else sitting in this seat?

And so you want to understand all those things and then build something that is fair and that works for all that. And then you have to allow everybody to be able to say, “This doesn’t make sense for us.” And I go into every conversation with somebody institutional, really being like, trying to convince them it doesn’t make sense, because I would only want to work with somebody who really is like, can convince me why.

I think there’s 99.9 percent of the time it wouldn’t have made sense for a Kickstarter to work with a fund. I think there was a confluence of reasons why with Fred, with Union Square at that time, with the low valuation it was, at the early stage with that very relatively small amount of money that Union Square was putting in, that those things allowed that to occur. And then even with that, for example, a lot of people don’t know, Fred’s been on our board for almost 10 years now. But that’s not a board seat that USV quote-unquote “owns,” and that was part of the thing. We were like, “You know a lot, we’d love to work to with you…”

USV doesn’t have a deal that requires, that gives them a board seat.

Right. And so it’s things like that where it’s like, I wouldn’t presume that there aren’t things that I could learn from the experience that Fred has had, but also to say that tying in a seat for Union Square in perpetuity is not something that I felt was appropriate for what we were doing. However, as long as it works, which it’s worked wonderfully, just as an individual, Fred has been amazing.

I mean, you know, he’s made zero dollars, the guy’s worked on our ... you’re going to work for nine years, for zero…

You’re his least successful investment.

Yeah. I don’t know about least successful, but yeah. I think that’s a better way to put it, least successful, successful investment in terms of fund.

I want to talk more about structure, but first, and I’ll take a break in a second, but I do want to just go back to when you launched, because I think this is an interesting thing that sometimes people talk about.

You launched in 2009. When does it click, like, not only is this working sort of at a small scale, but this could really get big? This could eventually be a $4 billion thing plus however much …

It’s funny, because I think that sometimes you start, you know at the beginning it’s like you’re doing everything right. It’s the kind of classic entrepreneurial thing, right? Like I was ...

Garbage has to get taken out, you gotta do it.

I wrote all the copy on the website for the first two years as well and so everything is one-inch in front of you. And then to do this it was never ... I was like, this should exist in the world, and then Charles and Yancey, we met and then it was like “this should exist.”

These are your co-founders.

Yeah, my co-founders. And then, you know, early employees, very early, it’s like, this should exist in the world, like the ones that helped us build it, even before it existed. And really that’s it. That’s as far as we got. It’s funny. We didn’t have projections and all these things. We were like, “This should exist.” That’s what drove us. We launched ... within the month, there was a project by this woman Alison Weiss, who is a singer/songwriter and she was in Georgia and she put up a project, like she’d gotten an invite from somebody.

The first six months, we had an invite system where we just gave out invites and let them just go and you know, woke up in the morning and literally I remember going, seeing what’s new, there’s probably three new projects and it was, she had nailed it. It’s like, probably the first time somebody saw on Twitter or somebody took 140 characters and nailed it and you’re like, this is a format!

Do you remember how much she raised?

I’m going to guess maybe less than 10,000? Probably between 5,000 and 10,000 for an album, an acoustic album. But it was just, her video was so good. Again, we didn’t coach her at all. She just knew how to use it. Her rewards were really smart. One of her backers put her over the goal in the first day or two and she Skyped with the woman who she didn’t know in Australia, recorded that Skype session and posted it as an update.

So, this is the thing we made and it’s being used exactly the way we sort of imagined it might work.

And better. Theory is one thing. I think often we’re in a moment now where we live in an academic, theoretical world often. This was in practice.

And when did this classic internet hockey stick thing happen, where like, oh ...

Never.

No, it didn’t?

Kickstarter’s never hockeysticked. We had that kind of, I don’t know, what do you call this? It’s a kind of like a ...

Slope?

Yeah, like a nice 45 degree thingy.

Healthy, reasonable business line?

And it’s a blessing, it’s a huge blessing. I can’t ... I really empathize with entrepreneurs and staff and board members and even users of companies where they have the hockey stick, where it’s the classic servers are melting, we need 100 people here this month. I mean, I can’t imagine what that does to decision making and culture and all those things. Every time that happens the company literally, that started and the company that’s there at the end of that cycle is a different company.

That makes sense, but I also remember there was just sort of a wave where everyone’s doing a Kickstarter and my inbox is full of people trying to promote their company via a Kickstarter. And it’s now a verb, and weren’t you like a Time 100 person? It seemed like there was definitely a moment for you where you had a real velocity.

Oh, yeah, yeah. For sure. I mean, I don’t mean to say that ... I just think, you know, if you have that slow, steady climb, at some point people catch on in a way and it’s more prevalent in the media. There’s always been press around projects. If there’ll be a big project then there will be a press moment and maybe that seems like it speaks to where the company’s at in a moment, but sometimes it just, “Here’s an interesting project somebody’s interested in in the media.”

All right, well, let’s think about hockey sticks. We’re going to take a quick break and hear from an advertiser who may be having a hockey stick moment of their own. Be right back.

[ad]

All right, we are back with Perry Chen. You have just heard what we call a programmatic ad. We hope you listened to. Right, Perry?

Advertising is evil.

What? We love advertisers. They support this show.

No, it’s an attention economy.

Let’s talk about that.

Bringing down democracy and all that.

Did that theory of commerce and advertising and capitalism ... We talked about this a little bit. Again, from the get-go, was that baked into your projects that this would be a way for people to create art, media, other projects, and not have to go through traditional funding mechanisms?

You know, I almost want to say, it was more simple. It was like, at the end of the day for artists, creators, people who want to make things, I think that the more funding channels ... they’re so constrained, they’re so hard to get, that we just wanted to create another alternative.

Just more options.

And we wanted to make our alternative something that we felt was something you could be proud of and you could stand by and you maybe didn’t have to make certain sacrifices, whether it’s creative or ethical, for that channel.

So how do you feel about the fact that your mechanism — the idea of crowdfunding, loosely — has now been picked up and copied and modified, or attempted to be used by everyone from other companies that pretty much do exactly what you’re doing, like Indiegogo, to things that are much more generic like GoFundMe, Patreon has a subscription version of this. And then periodically you see the biggest companies in the world, right, YouTube and Facebook, trying to pick up a piece of what you’ve done. Does that make you feel proud, like, “I did a cool thing. You guys are all figuring it out.” Or, “YouTube should not be doing a crowdfunding thing”?

I think ownership over ideas is a tricky thing. I think that once they’re out, they’re in the world, people will build on them. To me, all these things you mention actually ... I understand if it can all fall into one parent, but I really see the differences in them that are really material in my mind. And I think that a lot of these things were things that ... I think focus is really important. Our mission is to help bring creative projects to life. Our mission is not to be the largest crowdfunding company. And I think that that’s really instructive on a day-to-day basis as to, like, what do you want to do?

Because again, the GoFundMe thing now, sadly, has become a way people cover medical costs.

I think they raise more money on an annual basis through GoFundMe than we do at this point, I would guess.

It’s bananas. It’s sad. But on the other hand, you’d think, “Well, if people are already using Kickstarter to fund someone’s acoustic album, why not help them also pay for a surgery they need?” Which is also going to allow them to produce an album a year from now. Similarly, Patreon, which is an interesting company, Jack Conte’s an interesting guy, the big difference, right, it’s a subscription service essentially, right? “We’re going to pay you on a recurring basis because we want to support you.” Whereas you guys are project based. You tried a version of this, I think called Drip, right?

Yeah, so we did this kind of R&D side project called Drip. That’s still out there, but it’s invite-only. We’ve closed the invites and it’s going to ... Andy Baio and Andy McMillan from XOXO, really incredible community, are in the process now of working on the next gen of it. Which hopefully won’t be much ... Sometime this year, we’ll all learn more.

Our focus has always been on this way of doing it. The properties are: One, it’s project-based, as you say. The other is, the funding is conditional. You have to reach the goal that you set to get the money. Other is, it’s a rewards-based kind of patronage. Not like, you get 1 percent like an investment model. As the laws have shifted in certain places, people have tried some of the crowdfunding investment ...

Has not really taken off.

Has not really taken off, correct. And so for us, there really has continued to be this real focus on trying to continue to iterate and perfect a tool for helping creative projects come to life. And I think that speaks to maybe some of the, “I need money for surgery,” or something like that. Why we’ve never done those things.

How often do you have that conversation internally, like, “We should do this, either because our users want to do it, our creatives want to do it. It would allow us to make a bigger business, and that could be a good thing.”

Yeah, I think the important thing again is the primacy of ... A lot of the questions you’re asking would be if we were a classic corporation with a shareholder primacy, meaning that the ultimate goal is maximizing shareholder value. And you debate short or long term. But that’s it. Again, with an organization like ours, which is to help creative projects come to life, that’s the primacy. And so every conversation you have has that in the room.

And what about the version of the conversation that says, “Right, primacy, focus on mission, that’s all good. On the other hand, there’s no reason that we have to do things exactly the way we did them 10 years ago.”

Oh, of course. We should not.

”We should evolve, we should try new things. And if we’re bottled up, we’re eventually going to ... it’s not going to work.”

No, but the thing is, you try new things, absolutely, to help creative projects come to life. That’s the primacy. The primacy’s not, “Keep doing what we’re doing.” You shouldn’t do that. You evolve to better serve your mission. But to better serve the mission you have, say for Greenpeace, there’s probably ... I don’t know their mission, but something about the environment. That’s really more of what I’m saying. Not the specifics of how you go about and do those things.

Right. Your version of Patreon, right, you wouldn’t call it that. But your subscription-style thing, that was Drip, that makes sense to me, right? You say, “Mission, but we’re not going to make it specific to a project. We’re still going to have the same end goal, which is to help someone make something cool.”

And we still focus on the same group we focus on Kickstarter, which is not subscription use for any type of thing, which still was kind of the same kind of cohort of ultimately people looking to produce creative projects. When we launched it, it was within that prism as well.

So why do you think it didn’t work for you guys?

Well, I think a couple things. One is that, I think classically, focus is always so important. It was an R&D thing. It was kind of invite only. I think that it’s good to sometimes ... You got to take a little bit of risk, otherwise you end up being, as you say, you don’t evolve. You also need to be able to try things and then pull back at the right moments. And you learn.

And I think we tried to do something really narrow, which is like, “We’re not going to just do subscriptions. We want to do subscriptions for this cohort and see if we can help drive forward the space.” We’re not interested in market share. It’s like, “Can we help make subscriptions something more viable for the types of creators we serve?” I think subscriptions has been showing legs in the digital media space for recurring digital media.

Podcasts.

Podcasts, web series, things like that. I think for other things, it still hasn’t yet shown it’s an effective, broader tool. And so I think we were trying to see if, could we ... since that’s our market, or the creators we serve to serve our mission, we wanted to see if we could push the conversation forward through that.

You guys have done a lot of technology-focused stuff, a lot of gadgets, and then a lot of media-focused stuff. Is there a kind of Kickstarter project you would love to see more of that just hasn’t really happened for some reason? Or hasn’t happened with the same velocity or volume?

I think at this point we are really past a point of “hasn’t really happened,” because it’s been over 150,000 projects. The projects that raise a ton of money or that really fit with the kind of focus that is really prevalent in the media, get the press and go out there. But if you really go digging deep ...

Yeah, but you guys also put out your numbers and you say, “This is where the bulk of our stuff has been happening.” You can sort of see it.

Right. But if you go and see that, you’re going to see the bulk in music and film, not in the areas that get the most press, actually. When you see the most dollars, then you start to see it differently. But you see the most projects ... The amount of music projects that are funded, that raise $6,000, it’s really large. Short films, things like that. So, I get it. It’s like, the “sexier” stuff for press, it does start to feel outsized.

But all this to just say to your question, I do think that we’ve kind of seen ... There is a way where Kickstarter is like a cultural map. It’s like a map of culture, you see a kind of thing, subcultures, in the creative world that are kind of coming up. You start to see the small projects that come on to Kickstarter that are these scenes, these genres ... maybe not being birthed, but kind of not too far after.

So you’re getting sort of an early warning system. Like this is bubbling up in the culture, this is interesting.

Yeah. The truth is that how much we’re paying attention to that where we have a map, or like, “Oh my God, look at this new genre bubbling up.” That would be awesome. And I think those are the kind of things that are really exciting. How much could we do something like that, that could then again serve helping creative projects come to life? Could we notice nascent creative movements and find ways to ...

And right away go into, “Oh, and you could sell that to someone, because that’s important information.”

Yeah, no. We’re not trying to sell a trend report. I mean like, look, I’m not trying to be ... I’m a pragmatist, and any kind of strong opinion I have around things — for example, advertising — it doesn’t come from ... it only comes from the fact that I believe that, fundamentally, it ends up driving the attention economy, which I think is undermining our general sanity and consciousness. I’m not really interested in demonizing individuals.

Or individual ad-supported podcasts that you’re on.

Look, you know, there’s a lot of artisan creators that have taken money and sponsorships and have done commercials and things like that. That’s why I say, the one thing I question in the place we are right now in culture and discourse is conversations get too academic, and we live in a practical world. So I think there’s a place for both, but it can’t just be academic.

If I were to sit here and say, “You guys shouldn’t have any advertising,” I wholly believe this with my heart. However, I understand that people that are here are trying to make practical decisions. “Well, then maybe we don’t even have a podcast or exist, and the impact the podcast could have doesn’t exist, so how do we even judge that?” These are hard things to decide. And then, are we here to basically solve this problem or are we just one tiny cog that ultimately has to go the way the wind blows.

And again, you’re not prescriptive about that, within the boundaries of, “We have these rules about what kind of project can work here, but if you want to do this and then eventually create an ad-based business, Godspeed, we’re not going to stop you from doing that.”

Yeah, I don’t think we’re trying to appropriate that much control, especially over creators. We can say what you can and can’t do on our platform.

I do remember, again, and I would assume this is the first few-ish years of Kickstarter and when it sort of kicked off and all of a sudden, Warner Bros. was crowdfunding. I’m always confused whether they actually used Kickstarter or someone like you to fund the Veronica Mars movie, right?

We did have a Veronica Mars movie, yeah.

And Zach Braff, the guy from Scrubs.

Yeah, he did. Zach Braff, Spike Lee.

And every time that would come up, there would be, “Wait, this isn’t what Kickstarter is supposed to be used for.” People were upset by it. And again, my inbox would just be full of people who were using you as a marketing mechanism, the same way that IPOs were supposed to be marketing mechanisms in 1999. The thing existed so people would pay attention to it. I’m assuming, from the little I know about you and the little conversation we’ve had, that you must have bristled about some of that.

I think it’s interesting. I would say that I am certainly somebody who, in general, when I see something where the celebrity and the brands and all this stuff is coming, I’m like, “Damn, it’s over.” So I’m super sensitive to the reactions of people.

The party got too big, it’s not cool anymore.

Forget cool. This is utilitarian stuff. I’m an artist, we’re trying to get work done. I think a lot of artists and creators who are there to be cool, and creators who are there to just get the work done ... I’ve loved filmmakers, because filmmakers, like cool musicians, and I love music, I’m from music. Cool musicians, in their mind, it’s always like, “How does this make me look?” A filmmaker is like, “I’ll wash your car, I’ll clean your house. I just want to make my movie.”

”And I want someone to see it.”

Yeah. And I really admire that. I really admire how they can put the ego aside. I’m sure a lot of musicians would like to. I know it’s a more ego-driven business, so I know it’s something they may have to deal with more. Reorient me. What was your question again? I’m getting there.

I don’t know if it actually happened, or if it’s just my memory ...

Oh, yes, sorry. Thank you.

... Motley Crue was showing up in my inbox saying, “We’ve got a new Kickstarter for an album.”

Well, there wasn’t Motley Crue. The example I like to talk about is the great Spike Lee. I don’t know what people think. I don’t know if people think that Spike Lee can call up Hollywood and Hollywood’s just like, “Where do we wire the money?” That’s just not how it works. So, who more is a place, that’s to help creative projects come to life, for than an independent filmmaker, Spike Lee, who has a canon of work and wants to make a film, and it isn’t so easy for him to get the money. And when he does, they’re probably like, “Okay, Spike, why don’t we change this and why don’t we change that?” Who is it for? I don’t understand when people say, “Oh, you’re too successful.”

Now, if he’s trying to make a Burger King ad, yeah. But that’s not what he was trying to do. He was trying to make an independent film with a script he wrote in the way he wanted to make it. And he was going to go to his fans, who he’s given his work to for 20 years, and ask them for their support. I mean, I get the impulse of, “Celebrities are here, something must be bad or wrong.” But I just say, underneath it, it’s wrong.

Not only that, but the results of Spike Lee bringing his thousands and thousands of people was, we saw people who came to back Spike Lee’s project go on to back other independent filmmakers. So, as opposed to what people thought, it’s like, “Oh my God, people are going to come to Kickstarter, they’re going to see Spike’s film, and they’re going to give him 10 bucks instead of mine.” That’s not how it works. He promotes it, he brings people in. And then now those people go — and some of them, a few percentage, back other projects. And that’s meaningful.

Bring it on, Spike Lee. Bring it on, Zach Braff. If you have a cool thing you want to do and it fits in our parameters, fine. We’re not worried about being appropriated as a marketing mechanism.

No, I think you want to be worried about that. What I’m saying is that this manifestation is not that. I understand why it can seem like, “Oh, it is that.” But that case, Spike Lee, these independent creators coming, that is not the case. That’s not the case. So I don’t mean to say ... There’s still a lot of things that we don’t do as opposed to all the other sites you mentioned for the most part, which are anything. We are probably the tightest, by far, by what we do and we don’t. We’re trying to keep it a space for creative work.

It’s unfortunate, I understand how it occurred. I think that those guys and Spike had to go through a whole media cycle where he was getting hit, and it’s really unfortunate, especially for somebody like him. But we released a blog post trying to show some of the numbers, to show how ... this sense of it’s a pie getting cut up amongst creators and now these big names are taking a bigger piece actually is not how it works. The pie is still getting sized. And he’s bringing people to the ... he’s bringing some pie makers, or something.

I like that. I’m hungry. So the metaphor’s working in some way. Let’s take one more quick break. Maybe we’ll hear from a sponsor, maybe we’ll hear from one of my friends at Vox Media who wants to tell you about one of their shows. Who knows what we’re going to hear, it’s programmatic. We’ll be right back.

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Back here with Perry Chen who’s going to go to Chinatown after we have this conversation. You grew up in New York City?

Yes. Born in ‘76. Grew up in the city in the ’80s and ’90s. Different city.

You do not meet a lot of native New Yorkers in this business.

This is something that, if you don’t mind, I want to talk about this. I hear this over and over. The spaces that I’m in a lot these days in art or around Kickstarter. You hear this a lot, “Oh my God, a real New Yorker.” And it’s true.

Sometimes it means Westchester.

But every once in a while I also meet somebody and we’re like, “You’re from the city?” “You’re from the city?” And we’re like ... And I looked up the stats a few years ago because I was like, “This is befuddling to me.” And it’s about 50/50 in New York City, New York City born and not. So the rate at which we’re actually stumbling upon each other, in the kind of spaces that we’re in, is not indicative of the population at large.

What do you think that means?

Well, I think that means that these are bubbles. I think it means these are bubbles.

Cultural bubbles? Not economic bubbles.

Yeah, yeah. These are cultural bubbles. And they’re ... You can’t decouple them from being economic bubbles as well.

I think a lot just about entrepreneurs and their, like writing and talking, writing about entrepreneurs and talking to them, this is not an original idea. But a lot of them are from the top of the socioeconomic stratosphere. Even if they’re not very rich, they have a safety net of some sort, even if they don’t think they have a safety net. They could drop out of college or they could not take a job. And again, in terms of the life, they tend to be in their 20s, because that’s when you have the most flexibility. So you grew up in Chinatown?

No, I grew up in the city, but I grew up on Roosevelt Island, actually.

Okay. Which, if you have spent no time in New York City, you won’t know where that is, but that’s the cool ...

Yeah, it’s pretty much the center of New York City. It’s a small island that opened in 1976 as a project by the State of New York. When it opened, it was all government housing. So these are projects done by the State of New York. It was a thing called Mitchell-Lama, which is the government initiative in which this created all subsidized housing. And it was this grand experiment by the state.

So now it’s between the East Side and Long Island City, where Amazon wanted to go, and there’s this cool park there they’ve opened up. I was there this summer.

Yeah, yeah. So ‘76, my parents moved there when I was three months old, when the island opened, within the first six months of it opening.

What’d your parents do?

They’re both city workers. So my mom was a teacher. She taught at public schools, public high schools. The longest tenure she had was at Martin Luther King High School, which is in the West Side, in the ’50s, I think. My father’s a social worker for the City of New York. He worked in elderly home care. So he basically would go around for people that were on welfare or otherwise city supported and making sure that these elderly people had, that the home attendants that had been assigned to them by the city, that they were getting their medication, they were getting whatever help they needed. And he would just walk around, down here, Lower East Side, Chinatown, etc., do that, and then come home.

So your parents are government workers and then at some point, you’re now in internet-land and you’re doing internet startups and you’re raising VC funding. How aware are you at the time that your background is vastly different than most of the people you’re working with and talking to? Is that something in the forefront of your head, or it sort of sticks to the back most of the time?

I think it becomes more and more apparent. I think it was always there. But I would say it was apparent, and I think each year it gets more and more apparent.

Do you feel like that’s something you wanna address? Or, that’s just a fact of life and you shrug and it is what it is?

Well, I think the times, in a way, call for it. I mean, I think we’re in a moment right now where people are really interested in talking about where do we all come from? What are the experiences that you bring to the table? And so, in that sense I’m interested and I’m happy to talk about that. As you say, I think sometimes it’s easy for people, even given how radically different Kickstarter is from many other companies, to just say, “Oh, you’re a founder of a company,” or a founder of a “tech company.”

And you get a picture of what that person is, even if he can’t articulate it.

You do. And, would too, and I do too. I mean, you know, it’s just like bias. It’s like, everybody’s got some sort of thing going on. We’re human. So, I do too. And I think that it’s important to lift the hood a little bit so you’re not just projecting, and you’re understanding where things are coming from. And so, yeah, that’s my experience.

For me, I wasn’t in the technology space. I wasn’t looking to get into the technology space. I wanted to solve a specific problem that called to me, that I felt was socially important. I continue to deeply believe in it. And I come from a place from my parents where, before social justice was now a new term. Because, it was the old ’70s, ’60s social justice. Right?

Yeah.

At the household I grew up in, it’s like, “do something.” Try to do something that contributes. And I think that’s what’s driven a lot of the decisions. It’s like, I’m not gonna turn this into some sort of vehicle that somebody else can use to profit-maximize. I’m also not gonna do that. I’m only here to try to solve these problems to the best of my ability.

My responsibility is to steward this to its mission. That’s why it exists. I won’t take ... I’m not gonna take the shortcuts or I’m not gonna exploit it to enrich myself because I can and because everybody else does it and because nobody would really question me.

I don’t need to talk about it or say, “Hey, I didn’t do this and everybody else took the money and ran.” This was normal, in a way. Listen, every day, all of us make decisions that aren’t maximizing our material interests, right?

Some of us think that way. But not that many.

It’s true. I do think maximizing material interest, I don’t think you have a lot of people who are doing that. A lot of people maybe go ...

I over-index based on the people I talk to and write about, but yeah.

Right, that’s true. But I mean, in a personal level.

Yes.

In a personal level, maybe not as in their role at the company which is ... The dissonance between those two things is deeply problematic. Between what people are meaning to do. But I’m just saying ...

There’s a culture of saying — again, this is both CEO culture and also just sort of pop culture now — if you go to the WeWork upstairs, hustle culture, right? This idea of “you should be spending all of your time trying to figure out how to maximize your time so you can get maximum return.”

Sure, but what I would say is that do those people not see their family?

By the way, I think it’s weird and gross.

I’m just saying, do those people not see their family? Do those people not see friends? I’m sure it’s all well beyond anything I would think is the right way to be a person in society. However, I think, what I’m saying is, except for true sociopaths and psychopaths, everybody is trying to balance it in some way.

They may over-index well beyond anything I would feel like is okay. I’m saying we all choose to calibrate differently within that.

There was a rough article about you in BuzzFeed last year. I’ll do the very short version. It’s after you ...

The least-read article in the history of BuzzFeed.

It’s funny because I only found it through Google. I didn’t remember seeing it the first time around. Anyway, it’s about you coming back the second time to run the company and a lot of folks leave/are pushed out, and at one point it has you talking to the staff about this and talking about your background, explaining that you’ve got a different sort of take on the world, kind of in defense of what had been happening. Did that argument, do you think that resonated with the company when you talked with them?

I think it’s always challenging to talk about a body of people as one mind.

Sure.

It’s like when people are like, “The black vote is gonna do this.”

“What do all the people think?”

Yeah, there was probably maybe 120, 130 people at the time and I’m sure there was a diversity of opinion. For me, I was more of like, “Hey.” I knew everybody really well for the first five years that we built this and that I was here straight through. We were a small organization, it was more a chance to interact and get to know each other, more touchpoints.

Five years making decisions together and then I was away for three-and-a-half years and I was away, I mean, I came back and I only knew maybe 20 people of 130.

Why did you come back?

I think it was never my plan. I couldn’t have been happier going back to the studio working on art, but I’ve always felt a responsibility as a steward of the company and not because of legacy or any of that stuff, to be honest, because I don’t really think that stuff is that important. It’s very personal, it’s very ego driven.

But what I think is that there’s such a long continuum of people that have been involved in Kickstarter. From people who invested ... My friend who was a schoolteacher invested. It’s not just the Fred Wilson at Union Square.

People invested, early employees who took much lower salaries to help bring something to life. They sacrificed the money they could have made because they felt the mission was important. I mean, this long continuum of hundreds and hundreds and hundreds of people that I was the primary touchpoint for.

Telling the story of Kickstarter, saying why this mission is important, saying what we wanted to create. At the end of the day for me, that was like ... To live up to the responsibility was, when the company kind of needed some help, that I wouldn’t opt out of that. I didn’t say that this is something I wanted to do, but I didn’t ...

So, bat signal goes up. “Perry, we need you back.”

Turn it down. It wasn’t necessarily like that, like, hey, I got a call from the board and they’re like ... I’m on the board, the board isn’t that massive, but it was more of like, when we saw that maybe we need to kind of just ...

It’s hard when a company exists. Most companies are trying to let’s run to ring the bell, let’s run to sell. It is a much more difficult thing to try to exist in perpetuity and actually try to get better. It’s challenging. And when we saw, “Hey, rising to that challenge is so hard, we may not be on track for that really hard thing.” What do we do? Then we look around, it’s like, hey, if we wanna make a change, do we have anybody right now that we think would be able to step into this role?

When we didn’t think we did, then I think it’s like, okay, well, I’ll see what I can do and try to help and try to get things, again, where they need to be for the mission, and then again step back into a role that’s a more supporting role.

Which is what you’re doing now. Was that always the plan? “I’m gonna come in for a couple years and then I’m gonna step out of here”?

I don’t think time-wise was ever really a thing. It was more of if it’s three months, if it’s longer. I think again I was driven by not ... Just the responsibility that I felt to that long lineage of things and I hope the sooner the better.

What was the thing that needed to get fixed when you came back? What was the problem that you were trying to solve?

I don’t think it was any one thing but to try to be a little bit ... Not try to sprawl too much. I would just say everything works backward from the challenge, right? And the challenge for Kickstarter is to help creative projects come to life.

Then the challenge is how do we have the most impact and the most impact over time? Because we’re not working on one day, we’re working as ... To do that, you start to ask yourself, okay, well, to do that over time, it has to be able to evolve, right?

That means it has to be something where you can continue to get really great people to come and bring their ideas and bring their energy. People are super passionate about the mission and some organizations you see, they just exist. Some organizations like, this thing seems like it’s ... Yahoo just existed, right, at a certain point.

They couldn’t articulate why it existed.

The reason is because there’s a group of people who are like, we’re only focused on the next five years and then we’re all gonna be gone and the mission here is to make the most money, just hand it off to people who are trying to do that.

If you have a real mission, like a Greenpeace, that again is the mission. How do you not only have an organization that just exists but gets into a cycle where it can continue to be better? That’s a second-order problem.

And then the other thing which is key is how do you make it so it’s not dependent on any one person or any two people, any three people, or four people? Because if you want something to exist in perpetuity, for whatever reason ...

How does it work without you showing up periodically and saying, “I’m the founder and this is my mission”?

Correct.

Right.

A hundred percent. That was going in the door, the five Xes to solve for, that was at the top of the list.

When you announced you were stepping down at the same time, there was a story about the fact that your staff was unionizing. I don’t think that things are connected but the interesting thing to me was there was a line. Someone printed an internal memo that talked about you guys raising money. I’m trying to figure out how that works 10 years in when given this whole conversation we’ve had about that you’re not gonna sell, you’re not gonna go public.

Totally. Yeah, I’d love to talk about that.

How do you get someone to put more money into Kickstarter and also why do you need more money?

Yeah, so, I’ll start with the first one. Maybe it’s faster. I think the way we’ve always approached it is, we’re always happy to talk to people who we think are simpatico partners, right? Whether it’s you’re gonna raise money for them now or whether you’re building a dialog so in the future, if there’s something you wanna do that helps you better the mission or in the time of need, that dialog is already established.

In the space we’re in, the way we operate, there’s a very small group currently of investors that could, that with Kickstarter ... because as you say, we’re not creating a big liquidity event of selling or IPO’ing. If you join us, we need you to be a very long-term partner or a permanent partner. Invest and then be happy with, in the years we’re able to, have a dividend or theoretically sometime in the future sell to another approved investor that’s willing again to have ...

The way you’re gonna get your money out of this is either through dividend or down the line, maybe someone else is gonna put money in and buy some of your stake out.

Right. The people that we’re talking about are now, it’s not people who are trying to maximize profitability for their investment. You’re talking now about people or organizations that are basically both looking at the impact Kickstarter makes in the world like they would a nonprofit, and then also, yes, there is some potential financial upside as well.

They can look at both of those things together and say this is worthy for us, this makes sense for us, and that’s the group.

Like everyone else in media, you’re technically a media company, you’re describing Laurene Powell Jobs, I’m assuming she’s gonna write you a big check.

I think that there’s a group that I’ve seen over the past four years or so and I feel like it’s funny. In a lot of ways with Kickstarter, with public benefit corporation, with this conversation now which is tied to that stuff … I’ve had both the opportunity and the challenge of being out there in uncharted territory.

Having these conversations the past three-four years with potential partners, fascinating partners, you see both. Often you’re sitting across the table from each other and you wanna work together but there’s some structural challenge to it. I just gave a talk at the Skoll Forum that’ll come out shortly. It was specifically on this, trying to go to that mecca which I had never been to before and just try to let people know that hey, there’s often institutions that we might talk to or even foundations that will invest for profit and they’ll also do a lot of impact work.

Somehow because we are in the middle, we’re a blindspot, and they don’t intend for that to occur. It’s just that they’ve built their administration to yesterday ...

There aren’t many of you, right?

There aren’t many of us, and Patagonia, which is a great public benefit corporation model, is a privately held company by the Chouinard family and as far as I know, I don’t think that they have capital needs. As the other really prominent alternative structure of the US, public benefit corporation, I do see I’m kinda out there a little bit and having these conversations and seeing these challenges that exist right now and trying to spend time to call them out and bust through.

Not just for Kickstarter, because what I feel is like we’re gonna need a non-binary world of corporate structure.

We need somewhere in between rapacious profit-making and nonprofit.

Yeah, and we need that, right? I’m not trying to impugn nonprofits. It’s just more to say, we need that suite of things. And to do that, you need models and you need them to be validated and things like that.

So, I think often, for years, about the bridge to somewhere. We all remember the great Alaskan bridge to nowhere that I think was a House or Senate project. Some pork. “The bridge to somewhere,” right? I think that public benefit corporation is a piece of it.

Since we’ve formed that, entrepreneurs reach out all the time and say, “Hey, I’d really love to form a public benefit corporation or be not a profit-maximizing thing. How do I do it? Is this model good?” When we get to the point where people are like, “Is this harder to get funding?” Right now, it is. It’s not impossible and we did it and I don’t tell anybody to not go for it and there’s other interesting ways. It’s better than ever every day.

Venn diagram is widening out a little bit.

It is. Busting through that wall, I think, is important, and the thing that I ... It’s just like when Kickstarter started, and again, we’re still talking about money on all these things. The intent was always there. If your friend was like, “I wanna make this short film and trying to raise 10 grand,” you always had the intent to help them. But what are you gonna do? Be like, “Oh, that’s cool.”

Here’s $100.

“Here’s $10.” It’s so weird. Once the form came of Kickstarter, then it wasn’t so weird and that’s the same thing with all these things. As the language is established, as the forms, the way these things are established, the intent is there.

There is money out there. There is good money out there that is willing to support things like Kickstarter. Just all this stuff is needing to be developed over this next year or two.

Just to go back to what do you need the money for? Is it to buy ...

Oh, I’m sorry.

The Fred Wilsons of the world who put money in 10 years ago and they want an exit or is there something you wanna fund as a company?

I mean, I think there’s so many things we’d like to solve for. I think there’s probably five, six things. I think one is yes, I would love to be able to have more capital for Aziz and his team.

He’s the new CEO.

Aziz Hasan’s the new CEO, to be able to try to do more, right? We’ve never tried to be big, we’re 150 people now but just a little more, a little more cushion. Again, we’re not a profit-maximizing entity. We’re not a rich, rich company. All of the money we made in the first five years, we used to build the office space.

It’s a nice-looking office.

Thank you. Then, I think helping facilitate some early shareholders and early employees and people who ...

“You worked for us for below-market wages 10 years ago, you gave us money without the hope of getting it back, here’s a check.”

Yeah, and again, not these crazy ... you wake up and you’re a millionaire. Just again, fair and cycling out. Allowing those shareholders who’ve been in for such a long time to move on to somebody or an institution or somebody who’s there and great, we’re good. Checking those boxes.

There’s a bunch of things like that that are kind of really ... They’re kind of esoteric things but just like public benefit corporation. The ultimate goal is trying to create something that, in perpetuity, can dynamically and better focus on helping creative project come to life.

Now, my focus is kind of going in that direction, which is like, we’re capitalist, one piece of it, corp governance structure, a public benefit corporation, things like that are pieces of it. It’s above-the-head stuff. It’s important, esoteric stuff.

What is honestly geekily cool is five, six years ago when I was talking about this stuff, people were like, “Yeah, yeah, yeah.” Now, I see people like, “Oh.”

They’re nodding.

Yeah, I mean it’s inside baseball still a little bit but people get why it’s important.

We’re having this conversation more often, right? This is a political conversation now.

Totally.

This is, at least on the Democratic side, what is capitalism?

On the right, too.

Yeah.

Surprisingly. I’d say that one thing is that we have these binary conversations all the time. Capitalism, socialism, binary, what do you wanna be? Again, there’s no academic capitalism that’s in play in this world. There’s no academic socialism in play. There is only things in the middle. Every regulation pulls you one way or the other or deregulation pulls you one way or the other. Right? Even culturally, those things pull you one way or the other.

These conversations have to be non-binary, and in America, we decide by each regulation whether we wanna be a little bit more academically capitalistic or a little bit more academically socialistic. So, we should stop talking about it in this way of where it’s really binary and start to get under the hood a little bit and see things like, for example, the current Delaware law that mandates that companies have shareholder primacy which ends up being maximized shareholder value.

Right, this is the sort of accepted standard definition of capitalism.

This is the source code. I love the conversation people have today about, last couple years about AI and people are talking about let’s imagine a world where you tell your AI, “Go to the store and get me some water,” and to do that, it just kills everybody because it’s the fastest way to get it some water. It’s like this is the boogeyman of the AI, right? I get it. That’s some scary stuff. How do you teach the AI to have X values?

Not kill people.

Yeah, let’s have this conversation. I applaud everybody who’s doing this. It’s critical. But the underlying thing is there is that you’ll tell this intelligence something and it will execute it in this way that may be literal and that the outcome is not what you wanted. What I would say is that since the ‘80s, springing out of Chicago school, Milton Friedman in the ‘70s, we’ve been doing the exact same thing already.

Which is that the way our law is around the mandates of profit maximization and the religion of this very specific American capitalism that has come out of that is it has been doing the exact same thing we fear, which is that people go and work inside organizations that are telling them that you have to maximize. You have to be a legalized sociopath.

Here’s the crazy thing. My last thought is this. We live in a country where no matter what you do, no matter how unethical it is, that we allow the answer to be, you can just say, “Well, I’m a business person.” That’s insane. Why do we do that? Because we just say, oh, that’s the law of the land and that’s just how things are because we’re not whatever, Soviet-era communists. It’s broken.

This is gonna be an interesting year to watch that conversation evolve or maybe not evolve. This is great. I promised a baggy conversation and I meant that in the best possible way. We got it. Thanks, Perry.

My pleasure.


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