More is not always better—non-linear effects in crowdfunding

Abstract

This research focuses on crowdfunding project features and its relation with the success of this project. The main purpose is to improve probability of success of crowdfunding projects. One can argue that "more is always better" resulting in attempts of daily updates. Contrarily, backers may be weary of numerous updates to work through, indicating a possible wear-out effect, implying the existence of an optimal level of updates. Our preliminary results show that previous research, built upon linear modeling, widely ignores important aspects of the relationship between key variables. We therefore picked six key variables that were previously marked as success drivers in crowdfunding and found most remarkably that none of the six variables clearly follows a linear pattern. These findings call for further investigation of the non-linear patterns within crowdfunding research.

The Right Time for Crowd Communication during Campaigns for Sustainable Success of Crowdfunding: Evidence from Kickstarter Platform

“…Comments were found to have more impact after 5-10 days while updates' impact was observed from day 20-30. Niemand et al [7] studied the non-linear effects of project updates on the success of the crowdfunding campaigns. They used optimum stimulation level theory and marginal utility theory to explain the observed non-linearity of project features.…”

“…Authors in ref. [7] concluded that the number of project updates had decreased effects on the crowdfunding success with a maximum of five updates per project as the saturation point. Their findings suggest that cumulative update features might have less effect on the success likelihood of the crowdfunding projects and thus call for more research on phase-wise updates.…”

“…A good number of researches have been done to understand the factors that contribute to the observed dynamics of crowdfunding projects. Previous researchers have focused on identifying features that contribute to the success of campaigns [2,[6][7][8][9][10][11]. Research by Mollick [2] found, using a linear model, that the chances of success are reduced if the project creators do not offer early updates and that the funding success is influenced by project quality, goal amount, and social network ties.…”

“…In their approach, it is difficult to capture the impact of individual update and comment features occurring in different phases of campaign duration. Only knowing the correlation between the cumulative values for updates and comments features, and the success likelihood irrespective of their distributions over the campaign period, may not be enough to know the important phase and features [7]. Considering cumulative values and the impact of combined features in campaign phases may hinder awareness of success contribution offered by individual features and values that occur in each campaign phase.…”