The concept of crowdfunding is rapidly becoming more popular, and people are increasingly turning to crowdfunding platforms such as Kickstarter or IndieGoGo. As such, there has been a growing amount of research focusing on how to increase the chance of running a successful crowdfunding campaign. The focus is on how to optimize elements such as the design of crowdfunding page content or reward building to get the best possible results. However, what is it that motivates people (both creators and funders) to actually use crowdfunding platforms? Gerber, Hui and Kuo (2012) conduct research to determine the motivating factors that draw people to crowdfunding platforms, and moreover explore how these platforms impact the successes of projects in general. Through various interviews with creators, funders and representatives from Kickstarter, IndieGoGo, and Rockethub, the authors gain insights into the motivating factors that stimulate people to use crowdfunding platforms.
Why do creators use crowdfunding platforms?
The findings of the study show that while creators are primarily motivated to raise funds, there are also social aspects that contribute to why they decide to use crowdfunding platforms. Firstly, the community aspect of crowdfunding provides creators with validation regarding their projects. The community can provide feedback in the early stages of the project, which can take away a lot of the uncertainties about how the project is seen by consumers. Moreover, the community validation aspect is shown to actually increase the creator’s perception of his/her own ability, which in turn stimulates increased motivation as well as increased performance in the project.
Secondly, crowdfunding platforms provide creators with the opportunity to connect with their funders and engage in direct collaboration. This shifts the emphasis from a mere financial transaction to engaging in long term two-way interactions with funders, essentially dissolving the line between producers and consumers through active participation.
Thirdly, the results show that creators are actively encouraged to participate in crowdfunding by being able to see successful past projects and the idea that it is possible to replicate those campaigns. In this sense, successful campaigns do not only draw more attention to the project itself, but they also provide social proof and an example to the public on how to become a creator.
Lastly, creators are motivated to use crowdfunding platforms because it provides exposure to their projects through social media channels. Since these platforms are becoming so widely used, they essentially provide a means to showcase a concept to the world without the creator having to spend significant amounts of money on advertising.
Why do funders use crowdfunding platforms?
Similar trends can be seen among funders that use crowdfunding platforms. It is found in the study that while funders primarily seek rewards, there are also social factors that contribute to the appeal of using crowdfunding platforms. Firstly, funders often become intrinsically motivated to engage and contribute to a creative community with similar interests. The idea of being part of a community and collaborating across different projects, strengthens the connections of people within the social network and provides intrinsic motivation.
Secondly, funders often become personally interested in the projects that they follow or fund, and as such become motivated to support the creator in realizing the campaign goal. Personal involvement allows funders to take pride in the achievements and developments of the project, which in turn makes the participation in crowdfunding more rewarding. The implications of perceived involvement in the project could also make funders more loyal towards both the creator and project. This could therefore lead to a greater motivation to create awareness for the project through word of mouth, and a greater motivation to fund future projects by the same creator.
What does this mean for crowdfunding platforms?
The research has practical implications for crowdfunding platforms. By stimulating the features necessary to form interactive communities, crowdfunding platforms can satisfy the aforementioned motivational factors that stimulate people to want to participate. By emphasizing and building on these elements – such as the communication channels between creators and funders, and enhancing transparency in the workings of past successful projects, crowdfunding platforms can increase participation on both the creator and funder sides.
Gerber, E. M., Hui, J. S., & Kuo, P. Y. (2012). Crowdfunding: Why people are motivated to post and fund projects on crowdfunding platforms. In Proceedings of the International Workshop on Design, Influence, and Social Technologies: Techniques, Impacts and Ethics (Vol. 2, p. 11).