Project Creators Research Articles

Innovation and knowledge sharing in crowdfunding: how social dynamics affect project success

ABSTRACTThe aim of this study is to contribute to the existing literature on innovation and knowledge sharing in crowdfunding, by exploring the importance of internal social capital, and how the previous failure of a campaign may lead to the success of a second one from the same project creator. Thus, the research question of the study is: how do social dynamics affect project success in a crowdfunding context? The paper reports an illustrative case study which has been promoted on the Kickstarter platform. The authors analysed data, documentation and physical artefacts, especially regarding the network size during the funding period. The results show that the self-learning which project creators gain from previous failure supports them in relaunching their crowdfunding campaign. However, various revisions take place during the second campaign (e.g. social capital size, product redesign and knowledge sharing) to achieve success.

Backer Motivation in Crowdfunding New Product Ideas: Is It about You or Is It about Me?

Entrepreneurs are using crowdfunding to reach out to the general public to obtain financial support for their new product development. Those who offer project creators financial support are called backers. In this research, the authors examine two types of backer motivation, other‐orientation and self‐orientation, and their respective effects on a backer’s funding decision on new product ideas at the reward‐based crowdfunding platform. Other‐orientation is defined as a backer’s altruistic motivation to help others when making a funding decision; and self‐orientation is defined as a backer’s egoistic motivation to pursue internal feeling, such as personal satisfaction and power to control the project. They find that self‐orientation has a stronger positive effect than other‐orientation on the backer’s funding decision. Furthermore, the authors examine the difference between men and women, and find that the relationship between other‐orientation and funding decision is stronger for women than men, but the relationship for self‐orientation is stronger for men than women. The authors conduct three empirical studies to test the hypotheses in both the backer’s and the project creator’s contexts. In Study 1, they adopt a survey method to investigate effects of the backer’s motivation on his or her funding decision in the film category. In Study 2, they use data of 600 film projects from kickstarter.com to examine linguistic cues used by project creators that stimulate backer motivation. In Study 3, they conduct an experiment to further validate results of the difference between men and women. Although some research suggests that extrinsic reward is a reason for backers’ funding behavior, the authors emphasize that their psychological need also plays an influential role. In addition, findings of the difference between men and women enrich the crowdfunding literature by discovering distinct backer subgroups.

Understanding the crowdfunding phenomenon and its implications for sustainability

Nonetheless the large body of knowledge rapidly accumulated on crowdfunding as well as the growing relevance of this phenomenon for sustainability, there are very few studies on the role of crowdfunding for sustainability-oriented projects, and many related issues are still far from being fully understood. This signalises a clear need for unveiling the main dynamics of the relationship between crowdfunding and sustainability, and also opening up useful directions for future research on this relationship. To conceptualize the implications of crowdfunding for sustainability, we propose and use a framework, encompassing five dimensions, namely the project creator, the backers, the campaign itself, the crowdfunding platform, the outcomes of crowdfunding campaigns. By interpreting and fine-tuning the findings emerging from the extant crowdfunding literature to the specific context of sustainability-oriented projects, we develop propositions that provide important implications for this type of initiatives. These implications can guide scholars in finding new paths of research on the topic, as well as provide practitioners with an instrument to better understand the relevance of the crowdfunding phenomenon for sustainable initiatives and make more informed decisions.

Money is not everything: A typology of crowdfunding project creators

While studies focus on how crowdfunding promotes the launch of innovative products or services through two-sided (creator-investor) platforms and digital tools, knowledge on the creator-side motivation is limited. To address this knowledge gap, our study identifies four types of crowdfunding project creators—social entrepreneur, fund seeker, indie producer, and daring dreamer—based on four motivations—achievement, monetary need, prosociality, and relationship building. We also examine how crowdfunding projects’ characteristics differ by the creator type and which characteristics are critical for enhancing projects’ performance. The study extends crowdfunding literature by deepening knowledge of creator-side motivation and contributes to crowdfunding practices by suggesting platform operators ways to attract and promote different types of project creators.

Evaluating the effectiveness of hazard mapping as climate change adaptation for community planning in degrading permafrost terrain

Permafrost in northern Canada is susceptible to degradation due to rapid climate change, with hazard mapping promoted as an important activity to guide sustainable community adaptation and planning. This paper presents a framework for evaluating permafrost mapping exercises designed to inform climate change adaptation actions. We apply the framework using a case study of the Incorporating Climate Change into Land Development—Terrain Analysis project (ICCiLD). ICCiLD is a hazard mapping project utilizing interferometric synthetic aperture radar to monitor ground disturbance and categorize land development suitability in seven communities in the territory of Nunavut, Canada. We looked at one of the communities, Arviat, as our case study. We examined technical data and drew upon semi-structured interviews (n = 19) with map creators and users. We found ICCiLD added new and relevant information for community planning, increased awareness of the risks posed by permafrost thaw and built stakeholder relations. Strong coordination and high public consciousness of local climate impacts emerged as key factors underpinning project success. Nevertheless, in the case of Arviat, the effectiveness of the hazard maps in influencing land-use planning was constrained by communication challenges between project creators and end-users. These challenges included limited community access to the data and uncertainty surrounding how to operationalize the map suitability classifications. Broader climate change adaptation challenges included the presence of other more immediate community planning priorities and a limited ability to incorporate Indigenous ways of knowing into a technical mapping project. The lessons from this evaluation provide insight for the development of mapping-based adaptations across Arctic regions.

Economic Consequences of Risk and Ability Disclosures: Evidence From Crowdfunding

We exploit the introduction of a and challenges (RC) section on the crowdfunding website Kickstarter.com to study the role of disclosure in markets characterized by severe information asymmetries and agency frictions. Although the RC section contains voluntary and unaudited disclosures, after its addition projects with already observably risky characteristics attract fewer backers and are less likely to be funded, and project creators who respond to the prompt to discuss risks and abilities increase their non-risk disclosures and use a financing structure that accommodates greater risk. Risky projects attract relatively more backers and funding when project creators respond to the prompt, consistent with increased disclosure mitigating market frictions. Our findings suggest that crowdfunders change the types of projects they support and that project creators modify their disclosures and financing structure when prompted to consider risks.

Fund Me to the Moon: Crowdfunding and the New Space Economy

The likes of Elon Musk and Jeff Bezos now occupy the headlines once dominated by Apollo and Soyuz. Described as New Space versus Old Space, debate surrounds the emerging commercial space industry and the role of nontraditional actors in the evolving contemporary space exploration environment. This article enters this debate by adopting a sociological approach to investigate the role of crowdfunding in financing space exploration today. We interviewed crowdfunded space project creators in disparate locations, from Moscow to Silicon Valley, who attracted capital ranging from $200 to over $1 million. We attempt to uncover their experiences using this distinctly social financing mechanism and find that although crowdfunding is unlikely to solve all of today's research funding conundrums, it does appear to increase access to space in unique ways. We argue, however, that the most interesting dynamic of this phenomenon is the way in which crowdfunding contributes to an increasingly democratic exploration environment and how this might impact space science research and the power structures of the space industry. This article concludes by considering possible implications of this trend and derives practical suggestions for both policymakers and individuals who may be considering the use of crowdfunding to finance space science research and exploration projects.

Reward-based Crowdfunding Technological Projects Determinants of Success: A Quantitative Study

Crowdfunding success in terms of the achievement of target capital in reward-based crowdfunding projects is impacted by many factors (e.g., past created projects, campaign duration, pledged capital). This paper studies the determinants of success rate (pledged capital/target capital) or (P/T) in successful technological crowdfunding projects. The quantitative study started by data collection of 328 successful Kickstarter technological crowdfunding campaigns which are later decreased to 289 due to model censorship. Tobit model was adopted as the censored linear regression model to determine the existence of relationships between the dependent variable (P/T) and the independent variables. Results suggest that success rate is associated with 7 independent variables: visuals, duration, internal social capital, comments and education are found to impact success rate positively while target capital and past created projects are found to impact success rate negatively. The study contributes to the literature in crowdfunding by paving the path to study success factors that might impact successful technological projects, and to investigate the significance of backers’ feedback and project creators’ education in maximizing their campaign’s outcome.

Openness as Platform Strategy - Evidence from a Quasi-Experiment in Crowdfunding

In deciding on whether to open up its marketplace for all ventures or to control access, a crowdfunding platform faces an inherent trade-off between market thickness and quality concerns. We discuss how the level of platform openness affects project creators and project backers and test our hypotheses by analyzing the entire ecosystem of a leading crowdfunding platform before and after a policy change. Opening up the platform increased the quantity and variety of projects on the previously access-controlled supply side, but not their novelty. The number of funded projects increased in absolute but not in relative terms. Moreover, the average quality of the funded projects declined immediately, as evidenced by a higher default rate of promised rewards and more complaints from project backers, in particular those with prior crowdfunding experience.

Delivery Rates on Kickstarter

Using a large survey with 47,188 backers of Kickstarter projects, I examined the factors that led to projects failing to deliver their promised rewards. Among funded projects, a failure to deliver seems relatively rare, accounting for around 9% of all projects, with a possible range of 5% to 14%. There are few indicators at the time of project funding as to which projects might ultimately fail to deliver rewards, though small projects (and to a lesser extent very large projects) are more likely to fail to deliver rewards, as are some project categories. The demographics of project creators (including gender, education level, and family status) did not significantly affect the chance of a project succeeding.

Post-Campaign Operational Problems Hindering Promised Rewards in Crowdfunding Projects

The aim of this paper is to contribute to the extant literature concerning the operational problems of crowdfunding projects by exploring how project creators are able to manage the challenges that occur during the fulfilment phase. Thus, the research question of the study is the following: “Why do project creators disrespect their reward promises in crowdfunding?”. The study adopted a case study approach of a crowdfunding project that contains rewards to deliver to backers after the fundraising period. A project titled “Coolest Cooler” was promoted on the Kickstarter platform during 2014. The results outline the primary operational problems (e.g., manufacturing, planning and budgeting and shipping) that are due to the incompetence and inexperience of the project creator. These problems demonstrate the importance of operations strategy during the fulfilment phase after a successful campaign. The authors suggest possible operations strategies in order to answer the research question.JEL Codes: M11, M13, O33

Transcultural Memory and the <em>Troostmeisjes/Comfort Women</em> Photographic Project

In 2008 and 2009, a Dutch photographer, Jan Banning, and an anthropologist, Hilde Janssen, traveled around Indonesia to document, with photographs and testimonies, survivors of militarized sexual abuse by the Japanese military during the three-year occupation (1942–1945) of the former Dutch colony, the Netherlands East Indies. We argue that the resultant photographic project can best be understood within the framework of the “politics of pity” and the associated genres of representation. The project creators anticipated a cosmopolitan audience that might be moved to action to support the survivors. Yet, as the project was exhibited in different sites, the women's memories were interpreted through local knowledge systems and mnemonic practices. We analyze the reception of these photographs in diverse local contexts.

Profitable Nonprofits? Reward-Based Crowdfunding in the Czech Republic

AbstractThis paper deals with crowdfunding as a new and alternative mechanism of nonprofit funding which has thus far attracted little scholarly attention in the Czech context. It focuses on the factors that affect a campaign’s overfunding rate and determines whether these factors are consistent among different forms of project creators. A comprehensive analysis of reward-based crowdfunding in the Czech Republic was conducted based on the data from 617 projects using the Czech crowdfunding platform Hithit that were categorized according to the status of the project creator. Using binary logistic regression, a statistic estimation on an overall sample and on a sample of purely nonprofit projects was executed in order to observe if the outcomes diff er. Th e key empirical finding is that NGOs tend to raise fewer additional funds than other forms of project creators. Except for certain specific factors, the effects of the examined factors were consistent across all samples. Th is new and innovative approach to resource insufficiency by using alternative funding sources presents an important and unexplored research gap in the (post-) transitive context of nonprofit sector studies, enabling a view of policy implications for Czech NGOs.

Opening the Floodgates: The Implications of Increasing Platform Openness in Crowdfunding

Managing platform ecosystems requires providers to govern the permeability of platform boundaries in order to strike a balance between openness and control. But is it worthwhile for platform providers to conduct screening processes for third-party offerings, or should they rather apply a laissez-faire approach and let the market determine winners and losers? In this study, we compare the market conditions on Kickstarter, one of the world's largest crowdfunding platforms, before and after a policy change that relaxed the previously stringent screening process for new campaigns. By analyzing over 230,000 crowdfunding campaigns with a combined funding of over $1.9 billion that cover a 4-year period around the policy change, we find that increasing platform openness was a double-edged sword for the platform's ecosystem. While Kickstarter's revenue from commissions surged after the policy change due to an increase in the number of campaigns available on the platform, funding conditions for project creators and backers deteriorated. Project creators have to cope with lower success rates and an intensified competition due to a growing disproportion of backers to campaigns, while backers face higher uncertainties as project creators invest less in reducing information asymmetries. Our evidence from this natural experiment therefore suggests that increasing platform openness for third-party offerings can destabilize a platform's ecosystem. We thus extend the literature on platform openness and on the implications of policy changes on platform ecosystems. Our findings also provide practical insights for different platform stakeholders into possible “ripple effects” that are triggered when policy changes alter platform openness.

Understanding Success according to Crowdfunding Project’s Initiators

Abstract Over the past few years, a large number of projects related to entrepreneurship ideas have appeared daily in the media, due to the fact that they were sold as new solutions for companies or gave origin to new companies. These projects were mainly created by individuals who were students, unemployed persons or working people and, consequently, did not have a company of their own and, in most of the cases, also did not have the means to finance their idea. In some situations, the creation of a crowdfunding project presents itself as a convenient and riskless option for funding and this is frequently the reason why some project initiators decide to launch a campaign. The assessment of each campaign depends on the expectations of the project creator, who is in the best position to decide whether it was actually successful. Untangling how a project owner can assess the performance of its project is of major importance, namely when projects are launched by individuals who ultimately carry all the tasks involved in the initiative. This is a field of research within crowdfunding that remains, to the best of our knowledge, under researched. We propose a framework for the analysis of the success of these projects and we test it on six crowdfunding projects launched in Portugal. Our goal is to shed light to the factors that can be used by project creators in the assessment of the performance of their initiatives.

Reward Scheme Design for Online Crowdfunding Projects

In this paper, we investigate the optimal reward scheme design problem for online crowdfunding projects where project backers’ reward item selection is assumed to follow the multinomial logit choice model. Our model shows that project creator’s effective marginal profit from each reward item is the same at optimal backing prices, and the reward scheme design problem can be simplified to that of finding a fixed point of a single dimensional function. We also extend the basic model by considering crowdfunding participants’ behaviors such as backers’ altruistic motivation and heterogeneous beliefs in project’s success probability and project creator’s reward updating behavior. Finally, we conduct sensitivity analyses to examine the roles of key model parameters. This study provides theoretical and practical insights on reward design strategies for project creators in online crowdfunding market.

Show Me the Money: Importance of Crowdfunding Factors on Backers’ Decisions to Financially Support Kickstarter Campaigns

Through the use of an online survey and supporting interviews of funders, this study explores which factors are most influential in people’s decisions to financially back Kickstarter projects. Findings suggest that Kickstarter has several distinct benefits for those who support its projects and offers them an experience that traditional production channels cannot. The results also indicate that backers typically feel involved in the process of creating the projects they support, and they are willing to take risks to see projects that are important to them come to fruition. This research helps to improve our understanding of the attitudes that drive Kickstarter funding, and it helps project creators know what aspects of their campaigns prospective supporters find most important.

Corrigendum

Colistra, R., & Duvall, K. (2017). Show Me the Money: Importance of Crowdfunding Factors on Backers’ Decisions to Financially Support Kickstarter Campaigns. Social Media+Society, doi: 10.1177/2056305117736942 In the above mentioned article, a line was inadvertently added by the author which has now been removed. Through the use of an online survey and supporting interviews of funders, this study explores which factors are most influential in people’s decisions to financially back Kickstarter projects. Findings suggest that Kickstarter has several distinct benefits for those who support its projects and offers them an experience that traditional production channels cannot. The results also indicate that backers typically feel involved in the process of creating the projects they support, and they are willing to take risks to see projects that are important to them come to fruition. This research helps to improve our understanding of the attitudes that drive Kickstarter funding, and it helps project creators know what aspects of their campaigns prospective supporters find most important. The corrected abstract has been updated in all the subsequent versions.

Does the crowdfunding platform matter? Risks of negative attitudes in two-sided markets

PurposeCrowdfunding offers a popular means to raise donations online from many contributors. Open calls for contributions involve another actor too, namely, the internet platform that maintains the two-sided market. This paper aims to examine the effect of this intermediary on contributors’ willingness to participate in crowdfunding projects.Design/methodology/approachAn online survey measures the relative effect of contributors’ attitudes towards the crowdfunding platform on two key behaviours: willingness to share word-of-mouth and willingness to participate in a project.FindingsUsing the theoretical framework of a two-sided market, the empirical study reveals that attitudes towards a crowdfunding platform moderate contributors’ willingness to participate due to several risk factors that affect the platform’s perceived usefulness and ease of use. These factors have negative influences on attitude towards the platform, which reduces support for the project. The effects are stronger for willingness to participate than for word-of-mouth intentions.Research limitations/implicationsDeclarative measures and a focus on the utilitarian dimensions of contributor participation limit the external validity of the findings.Practical implicationsWith the results of this study, internet platforms can find ways to improve the attitudes of potential contributors. Project creators can use the findings to adapt their communication campaigns and reduce inhibitions that keep contributors from using platforms.Originality/valueThis study advances marketing and crowdfunding literature by highlighting the potential dark side of a platform that functions as an intermediary in a two-sided market.

Youth Computational Participation in the Wild

Most research in primary and secondary computing education has focused on understanding learners within formal classroom communities, leaving aside the growing number of promising informal online programming communities where young users contribute, comment, and collaborate on programs to facilitate learning. In this article, we examined trends in computational participation in Scratch, an online community with over 1 million registered youth designers. Drawing on a random sample of 5,004 youth programmers and their activities over 3 months in early 2012, we examined programming concepts used in projects in relation to level of participation, gender, and length of membership of Scratch programmers. Latent class analysis results identified the same four groups of programmers in each month based on the usage of different programming concepts and showed how membership in these groups shifted in different ways across time. Strikingly, the largest group of project creators (named Loops) used the simplest and fewest programming concepts. Further, this group was the most stable in membership and was disproportionately female. In contrast, the more complex programming groups (named Variables, Low Booleans, and High Booleans) showed much movement across time. Further, the Low Booleans and High Booleans groups, the only groups to use “and,” “or,” and “not” statements in their programs, were disproportionately male. In the discussion, we address the challenges of analyzing young learners’ programming in informal online communities and opportunities for designing more equitable computational participation.