Friday, October 27, 2017

What Type of Projects Receive Support on Kickstarter?

What type of projects receive support on crowdfunding platforms such as Kickstarter?  Anirban Mukherjee, Cathy Yang, Ping Xiao, and Amitava Chattopadhyay conducted extensive research on this topic.   They examined over 50,000 projects on the Kickstarter platform over several years.  The scholars wanted to know how claims about the innovation would affect funding. Would projects that claimed to be highly novel receive more funding than those that claimed to be quite useful and practical?  Interestingly, they discovered that projects claiming novelty raised funds just as effectively as those that claimed usefulness.  However, claiming BOTH tended to be less effective.  Why would projects that claimed to be both novel and practical not receive as much support on the crowdfunding platform?  The scholars offered three possible reasons:

1.  Credibility:  People might view a project as too good to be true if it claimed to be highly novel and very practical/useful.  

2.  Risk aversion:  Perhaps funders wanted to invest in projects that they deemed feasible and likely to become implemented effectively.   They might have deemed the projects that claimed to be both novel and useful as highly risky. 

3.  Polarization:  Truly breakthrough innovations often can be polarizing.  Some people are fans, while others are haters.  Consider how people often reacted initially to breakthrough products such as the iPod.  Something claiming to both novel and practical might have a polarizing impact.  

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