archetypes of crowdfunders’ backing behaviors and the outcomes of crowdfunding efforts

jungpil hahnnational university of singapore

• crowdfunding as important, emerging online mechanism for sourcing capital

• novel phenomenon with great potential to fuel innovation growth

• nascent, but growing body of literature on crowdfunding

why crowdfunding?

• crowdfunding as important, emerging online mechanism for sourcing capital

• novel phenomenon with great potential to fuel innovation growth

• nascent, but growing body of literature on crowdfunding

why crowdfunding?

• implicitly assumed homogeneity in backers and backer behaviors

• 4.2M backers

• $638M pledged

• 42K projects successfully funded

kickstarter.com

Pebble

• 68,929 backers• $10,266,845 raised• from $100,000 goal

ouya

• 63,416 backers• $8,596,474 raised• from $950,000 goal

3Doodler

• 26,457 backers• $2,344,134 raised• from $30,000 goal

an exploratory study

initial research questions

• heterogeneity in crowdfunders’ backing behaviors

• is funding success associated with the types of crowdfunders a project attracts?

analysis approach

• heterogeneity in crowdfunders’ backing behaviors

• cluster analysis of project backer data

• is funding success associated with the types of crowdfunders a project attracts?

• regression analysis with types of backers and project success

the data

• randomly select 6,800 completed projects

• 414,737 backers of those 6,880 projects

the data

• randomly select 6,800 completed projects

• 414,737 backers of those 6,880 projects

Kim, Kyeongtae and Hann, Il-Horn “Does Crowdfunding Democratize Access to Capital,” INFORMS CIST 2013 (3 Papers ago)Zvilichovsky, David, Inbar, Yael and Barzilay, Ohad “Playing Both Sides of the Market: Success and Reciprocity on Crowdfunding Platforms,” INFORMS CIST 2013 (Next Session)

data sample

0%!

10%!

20%!

30%!

40%!

Art!

Comics!

Phot

ograp

hy!

Publi

shing!

Dance!

Film &

Video!

Music!

Theate

r!

Design!

Fash

ion!

Food!

Games!

Tech

nolog

y!

Our Data!

Kickstarter!

by categoryArt!

Comics!

Photography!

Publishing!

Dance!

Film & Video!

Music!Theater!

Design!

Fashion!

Food!

Games!

Technology!

Funding Goal!

Duration!

Backers!

Success Rate!

funding goal

$0!

$15,000!

$30,000!

$45,000!

$60,000!Art!

Comics!

Photography!

Publishing!

Dance!

Film & Video!

Music!Theater!

Design!

Fashion!

Food!

Games!

Technology!

duration

0!

10!

20!

30!

40!

50!Art!

Comics!

Photography!

Publishing!

Dance!

Film & Video!

Music!Theater!

Design!

Fashion!

Food!

Games!

Technology!

number of backers

0!

200!

400!

600!

800!

1000!Art!

Comics!

Photography!

Publishing!

Dance!

Film & Video!

Music!Theater!

Design!

Fashion!

Food!

Games!

Technology!

success rate

0%!

10%!

20%!

30%!

40%!

50%!Art!

Comics!

Photography!

Publishing!

Dance!

Film & Video!

Music!Theater!

Design!

Fashion!

Food!

Games!

Technology!

funding goal & success rate

0!

200!

400!

600!

800!

1,000!

1,200!

1,400!

1,600!

1,800!

2,000!

0%!

20%!

40%!

60%!

80%!

100%!

$100! $1,000! $10,000! $100,000! $1,000,000!

Nu

mb

er

of

Pro

ject

s (N

)!

Pro

ject

Fu

nd

rais

ing

Su

cce

ss (

%)!

Average Project Funding Goal!

Funding Success Rate!

Number of Projects!

heterogeneity in crowdfunders’ backing behaviors

clusters of backers

Cluster 1!

Cluster 2!

Cluster 3!Cluster 4!

Cluster 5!

Total Projects Backed (250)!

Success Rate (100%)!

Experience (24)!

0%!

20%!

40%!

60%!

80%!

100%!Cluster 1!

Cluster 2!

Cluster 3!Cluster 4!

Cluster 5!

Performance!

Exhibits!

Product Dev!

Concentration!

clusters of backers

Cluster 1!

Cluster 2!

Cluster 3!Cluster 4!

Cluster 5!

Total Projects Backed (250)!

Success Rate (100%)!

Experience (24)!

0%!

20%!

40%!

60%!

80%!

100%!Cluster 1!

Cluster 2!

Cluster 3!Cluster 4!

Cluster 5!

Performance!

Exhibits!

Product Dev!

Concentration!

Casual Wanderer

FocusedSupporter

CategoryMaster

One-timeTrier

CategoryEnthusiast

CategoryEnthusiast

One-timeTrier

CategoryMaster

FocusedSupporter

Casual Wanderer

archetypes of backers

• Casual Wanderers:

• infrequent backing but spread across a variety of funding categories

• Focused Supporter:

• infrequent backers predominantly in one type of category

• Category Enthusiasts:

• moderately frequent backing concentrated in one type of category

• Portfolio Masters:

• extremely frequent backing across all categories

archetypes of backers

portfoliomasters

categoryenthusiasts

casualwanderer

focusedsupporter

high

low

low high

backingfrequency

category concentration

is funding success associated with the types of crowdfunders a project attracts?

backer types and project success Model 1

Logistic Regression Model 2

OLS Regression DV: Project Success DV: % of Goal Raised Constant 2.8502**

(0.3257) 2.4073**

(0.1879) ln(Project Goal) -0.3693**

(0.0341) -0.1971** (0.0190)

Duration -0.0292** (0.0026)

-0.0059** (0.0013)

Casual Wanderers (%) 1.9496** (0.2457)

0.5054** (0.1460)

Focused Supporters (%) 4.8058**

(0.4437) 2.1402**

(0.2566) Category Enthusiasts (%) -1.6808

(0.8640) -1.2392** (0.4341)

Portfolio Masters (%) -21.5169** (2.0081)

-3.6664** (0.6405)

Number of Obs. (N) 6,343 6,343 Model Fit LR χ2 = 840.49** F = 16.16** R2 0.1437 0.0440 Significance Levels: ** p < 0.01, * p < 0.05

factors impacting project outcomes

• more ambitious projects are less likely to be successful

• longer project duration are less likely to be successful

• attracting casual wanderers and focused supporters is associated with project success

• interestingly, attracting a more category enthusiasts and portfolio masters is negatively associated with project success

some caveats

some caveats

conclusions

• there seems to be some heterogeneity among crowdfunders

• crowdfunding success may depend on crowdfunder heterogeneity

conclusions

• there seems to be some heterogeneity among crowdfunders

• crowdfunding success may depend on crowdfunder heterogeneity? !>