Tag Archives: Social Network

Share, Like, Subscribe – Earn What You Deserve

February 20, 2019 irisbominaar Leave a comment

Imagine writing a nice post for your friends on social media on something you have experienced that day. You put some effort in it, put in a nice quote, make a meme and post it on your social media. It turns out your friends like it so much, that they want to share it with their friends. And their friends with their friends. Before you know it your post goes viral and millions of people have liked or shared it. This off course sounds amazing, but what do you get in return? You get some likes and appreciation, but that often fades away faster than you can enjoy it. Moreover, many funny posts or memes are shared without acknowledging the maker of this post and claim it as their own. To tackle this problem, Steem, came up with a new social media platform, Steemit. Steemit believes that the users of the platform should be rewarded for their contributions to the platform. Therefore, on their platform you can earn rewards for the content that you post on the website.

How does it work?

Steem is a social network site where you can earn rewards as a publisher or as a curator. The website is developed using Steemit Blockchain technology and STEEM Cryptocurrency. The content that is written on the social media platform is written to the Steem Blockchain, where it is stored in an immutable Blockchain ledger. Users in turn get rewards for posting content or acting as curator in the form of digital tokens called Steem.

Everyday new Steem tokens are added to the so called community rewards pool by the Steem Blockchain. These Tokens are given out to users, based on the amount of votes that their content has received. Moreover, active users that have a high amount of tokens in their wallet get additional recognition by giving them so called “Steem Power”. This gives them the power to decide where a larger portion of the rewards pool is distributed too. (Steemit FAQ, 2019)

Below video gives an clear overview of how Steem voting works:

(Tomlinson, 2017)

As described above Steem tokens cannot only be rewarded by posting, but also by acting as a curator. Below there is a list of how a user can earn their digital tokens:

Posting: If you post and share it with your fellow users you can earn so called upvotes. The higher the amount of upvotes you deserve, the bigger portion of the rewards pool you will get.
Voting and curating: If you vote for a post before it becomes popular, you can earn a curation award. The amount you will receive for curating is dependent on your amount of Steem Power.
Purchasing: STEEM or steem dollar tokens can be purchased on various market exchanges
Vesting: By Holding your tokens to get extra steem power, you can earn extra tokens as reward for holding.

(Steemit FAQ, 2019)

Efficiency

This platform sounds as a dream come true for many contributors of the web, earning by simply posting or voting. However, the dream has not completely come true yet since there are some negative side effects causing the platform not to live up to its full potential. Below graph 1 shows that there is steep decrease in the amount of active users in the past month, indicating that people are no longer actively contributing to the platform. This decrease in active users can be described by the following problems.

Graph 1 – Active users per Month on Steemit (Arcange, 2019)

One of the problems Steemit recently encountered is that of the fluctuating crypto market, which can cause the valuation of the company to diminish tremendously. A few months ago, CEO Ned Scott Posted and announcement saying Steemit had to let go 70% of its employees and that they would focus on keeping the cost of infrastructure that is running Stemmit.com low (Scott, 2018). This sudden reorganization is due to the crash in cryptocurrency prices in 2018. The value of Steem decreased from 8USD in the beginning of 2018, to only 0,30 USD at the end of the year, causing a large decrease in the cash flow of the company. (Zachary, 2018) This is off course a huge danger for the Steemit platform, being reliant on such a unreliable currency.

Other problems are more related to the set-up of the platform. By giving extra power to users that have a high amount of Steem tokens, you create so called whales that have total control of the platform. (Masters, 2018) They have more voting power and power over the division of the Reward Pool, and thus have high control over what gets rewarded. This makes it extremely hard for new users to enter to platform and gain a substantive part of the payout.

Another important aspects of a platform is network effects, meaning that more users will generate more value for each other. For Steemit however, more users does not automatically generate extra value for the users, because there is also a form of competition on the platform. If more people will be part of the platform it will become harder to get large amounts of upvotes, and thus rewards. This causes the amount of reward to be spread more evenly over many contributors, making the amount of reward almost dismissible. By doing so the platform creates a trap for itself where more users actually discourages the effect of rewarding contributors.

A side effects for this increased difficulty to get upvotes is that Voting bots have been developed. You can pay these voting bots to create additional up votes on your article, and by doing so increasing your rewards. (Masters,2018) Articles do no longer get rewarded for their quality, but are more dependent on the amount of money people are willing to invest in voting bots. This diminishes the quality of the platform, since it cause low quality articles to also reach high amount of appreciation. Moreover it is causing prominent users to leave the platform, since it results in unfair competition (Skoll, 2018).

Steemit, Yer or No?

So, the idea of being able to earn rewards for your content sounds great but it has been shown that creating such a platform is harder than it sounds. Money always triggers a form of greediness, making people focus more on earning more rather than creating valued content. This causes cheating and collaboration which does no good for the quality of the platform. If you are still looking for a platform where you get more recognitions for you contributions, (but no money), check out Reddit. Do you really want to monetize your content you can always become an influencer on Instagram or Youtube.

Bibliography

Arcange. (2019). Steem Statistics – 2019.01.01. Retrieved from https://steemit.com/statistics/@arcange/steem-statistics-20190101-en

Masters, C. (2018). Losing Steem: One of the Most Active Crypto Projects Cuts Staff. Retrieved from https://cryptovest.com/news/losing-steem-one-of-the-most-active-crypto-projects-cuts-staff

Steemit FAQ. (2019). Retrieved from https://steemit.com/faq.html#Can_I_earn_digital_tokens_for_commenting

Skoll, M. (2018). Why I Left the Steem Blockchain. Retrieved from https://medium.com/@heymattsokol/why-i-left-the-steem-blockchain-bb0214a451b8

Tomlinson, S. (2017). An explanation of Steemit Voring Power – retrieved from https://www.youtube.com/watch?v=FLsPI65HzPI

Zachary. (2018). Steemit Lets Go Over 70% of Employees, Blames Bear. Retrieved from https://bitcoinnews.com/steemit-lets-go-over-70-of-employees-blames-bear/

Articles

New Ingredient for Your Diet: Virtual Support Communities!

March 5, 2018 374199dv Leave a comment

Keywords: Virtual communities; Virtual support communities; Public commitment; Identity-based motivation; Social identity; Weight loss

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Share your progress 🙂

Dear bloggers,

Session 6 of the course Customer-centric Digital Commerce will be about community commitment and sharing economies. The required readings for this session are about why people participate in collaborative consumption and what managers should know about the sharing economy. This blog post will provide some insight into the required literature for this week by showing the effect virtual support communities could have on achieving individual goals, for example weight loss. I hope you feel inspired!

Have you ever wondered why your friends share their holidays, high wines and new clothes on Social Media that much? Do you sometimes feel desperate by watching so much bullsh#t on the day that you have to work on your blog posts? Well, then buy yourself a large Starbucks at the campus and feel energized. But.. does it actually help? I have a better suggestion: open your Instagram or SnapChat App and SHARE YOUR PROGRESS. I can promise you will feel energized as if you drank three Starbucks in a row!

Unfortunately, a new trend is coming where people actually don’t like the Social Media Bloggers since it make people feel the grass is always greener on the other side (you might recognize this). However, you can use that grass to color yours and benefit from it! But.. how?

The answer is simple: grab your mobile phone, open your Instagram and share your personal progress. And yes: this has been confirmed by a very interesting paper.

Academic Paper
Let me introduce you a very inspiring study, named ‘Weight loss Through Virtual Support Communities: A Role for Identity-based Motivation in Public Commitment’’. The authors of this study published their convincing findings in the Journal of Interactive Marketing and concluded that watching others’ success on social media can actually be effective for your own success. In this study, they observed the progress of two different weight-loss communities over a period of four years, which is quite long. They found that those who had shared their progress online had greater success in achieving their weight-loss goals than those who did not share their progress.

The two communities included in the study are ObesityHelp.com, the best website for surgical weight loss support, and WeightWatchers.com, the site for the top lifestyle-oriented weight loss program. Within these sites, individuals can access information or create content via blogs, chat rooms, or comments. They write and share blogs and are encouraged to actively share their progress through both text and pictures.

According to the authors, social identity motivates public commitment in support of goal attainment. The sharing of intimate information and photos about weight loss goals in virtual space seems to be a key factor in motivating behaviors and thus helps people attain their goals. So, actually, people can share the greenness of their grass instead of thinking that it’s always greener on the other side! GO ONLINE AND SHARE YOUR PROGRESS. It might be more effective than just drinking coffee..

Side note: there are four types of virtual support community members:

Which type of community member do you think you are? For example on Instagram?

Figure 1 | Typology of virtual support community members (Bradford et al., 2017)

Why is it relevant?
Not everyone can get the support they need from other people they interact with in person on a daily basis, for example friends and family. It might be helpful that technology can support community building and goal achievement in a digital world. Virtual Support Communities, such as online blogs, Instagram Blogs, and Facebook allow for accessibility, availability and flexibility in how users represent themselves on their achievements. These communities help participants to keep motivation and strive for progress. It decreases feelings of loneliness and makes people feel more happy and supported.

Virtual Suppo…. what’s that?
Social media can be used to build connections and relationships to have impact on the world. Jim Rawson says social media can build a virtual community in which to transform the sharing of ideas into real life endeavors. He is an academic professor at Georgia Regents University and his primary research interest is health policy, process improvement and innovative educational techniques. You should watch this video if you want a detailed explanation of what virtual support communities can do for online users today. Examples of virtual support communities are blogs on Instagram, Facebook and several webpages.

Click on the following link to watch the TedTalk of Jim Rawson on Youtube: TedTalk.

selfie+weight+loss.jpg — Figure 2 | Example of Virtual Support Community on Instagram (wdtv.com, 2018)

Conclusion – ”Sharing the triumphs and tribulations of your weight loss journey with other members of an online virtual support community plays an important role in achieving success, according this new study. The study examines the role of virtual communities and public commitment in setting and reaching weight loss goals.” – Bradford et al. 2017

Critical Note
Strength: the study provides a new definition of virtual support communities by developing a typology of different users. This typology is based on both beneficiary focus and the breadth of sharing.

Strength: the study contributes an explanation of how the balance between compliance and co-creation influences opportunities for public commitment in Virtual Support Communities. Prior literature called for additional research into roles for value creation in online communities. The authors of this study provide answers to this demand.

Weakness: the authors do not explain the limitations of their study, they only discuss their contribution to prior literature. A critical note towards their own work is missing.

Weakness: the authors used two samples from the following communities: obesityhelp.com and weightwatchers.com. Both communities focus on lifestyle-oriented weight loss. The results of this study thus might be low in generalization since online communities differ in the subjects they are focusing on. It might be that sharing progress around for example career might be less positively working on others than the progress of weight loss. Losing weight is kind of health related and people would therefore feel more emotionally attached towards their ‘friends’. For sharing progress around careers, it might be that envy comes into play.

Suggestion: further research that investigate the effect of virtual support communities should incorporate several distinct online communities. Communities that both differ in user types (recruiters, learners, etc.) and are focused on different topics (career, study, health, etc.). Moreover, further research should make a critical note around their own work. This study doesn’t provide limitations, which is disadvantageous for readers’ confidence.

Are you ready to share your progress? I hope you feel inspired 🙂

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Bibliography
Tonya Williams Bradford, Sonya A. Grier, Geraldine Rosa Henderson, Weight Loss Through Virtual Support Communities: A Role for Identity-based Motivation in Public Commitment, Journal of Interactive Marketing, Volume 40, 2017, Pages 9-23, ISSN 1094-9968.

Author
D. Verpalen
374199
Erasmus University, The Netherlands

Articles

From e-commerce to social commerce

February 18, 2018 383790dr Leave a comment

A matter of trust

The advancement of Web 2.0 social networks brought new developments to e-commerce. In recent years, e-commerce has transformed to social commerce. Social commerce is a new stream and subset of traditional e-commerce, which combines e-commerce with Web 2.0 social networks.

Social commerce, trust & buying intention

Thanks to social networks consumers can now communicate, rate other products, review others’ opinions, participate in forums, share their experiences and recommend products and services. By bringing the features of Web 2.0 social networks to e-commerce, consumers can support each other in the acquisition of products and services in an online context. This results in more customer-oriented business models where customers can share knowledge, experiences and information about their products and services.

Social commerce has three main constructs that empower customers and increase the sociability of e-commerce:

Forums and communities: Online discussion sites that support information sharing;
Ratings and reviews: Provide comprehensive information about a product for potential customers;
Referrals and recommendations: Unlike brick and mortar stores, in online stores it is not possible to interact with staff, so customers rely more on other customers’ recommendations.

Trust is a central issue in e-commerce. Social commerce has helped to establish more trust in e-commerce platforms. Customers experience higher levels of trust as they can support each other through information exchange. This is because interactions and interconnectivity reduce the perceived risk in online transactions. Reviews, ratings and recommendations can indicate the trustworthiness of an online seller as customers consider reviews from other customers to be more reliable than information from a commercial website.

Hajli (2015) found that the three social commerce constructs significantly positively influence the user’s intention to buy. Trust appeared to be a mediating variable. Social commerce constructs have a positive effect on user’s trust, which in turn positively influences the intention to buy (Figure 1). To arrive at these findings, Hajli (2015) conducted a survey study with four constructs: intention to buy, social commerce constructs, perceived usefulness and trust. A five point Likert-scale was used in the questionnaire. Data was collected at universities in the UK. The final sample consisted of 243 completed and usable questionnaires. Next, Structural Equation Modelling (SEM) was used for data analysis. The hypotheses were tested with the Partial Least Squares (PLS) method. The findings underline that social commerce constructs, like customer reviews, are more likely to increase trust, and in turn increase customers’ intention to buy.

Amazon customer reviews

From a practical perspective, this study encourages online businesses to make a plan for reviews and to manage social networks effectively as it significantly impacts customers’ purchasing decisions. It recommends them to engage with their customers through reviews to develop trust. Other research indeed shows that 91 percent of customers read online reviews and that 84 percent trusts online reviews as much as a personal recommendation (Bloem, 2017) In practice, this implies that not offering customer reviews is similar to ignoring 84 percent of your buying population by not giving them the information they want to support them in their buying decision (DeMers, 2015).

To illustrate, Amazon optimised its business model based on customer reviews and ratings. Customer reviews are one of the most important ranking factors in Amazon’s A9 algorithm. It ranks product search results based on the positivity of customer reviews and rating. (Grosman, 2017)

Fake review problem

A weakness in the study of Hajli (2015) is that it does not consider that information related to the identity of the reviewers influences the perceived trustworthiness of a review. The paper simply finds that more reviews increases trust, which in turn increases the buying intention. However, in reality, it might not be that straight forward anymore with the rise of fake product reviews. Nowadays, it is hard for customers to decide which reviews to trust. There is looming crisis of confidence in online product reviews, which used to be a key factor in customers’ buying decision. (Silverman, 2017) As customers cannot trust reviews anymore, it can be questioned whether the positive relation between the number of reviews, trust and buying decision still holds.

Increasingly, customers pay careful attention to reviews, e.g. looking for reviews with a Verified Purchase tag. Nearly 66.3 percent of Amazon reviews are five-star ratings, which is highly unrealistic. Reviews on Amazon are a key factor when making a purchasing decision and without reviews it is difficult for online retailers to gain sales. In an attempt to boost sales, retailers offer reviewers free or discounted samples in return for a positive customer review. So, it is no surprise that 96 percent of paid reviews on Amazon is rated four- or five-star. (Cipriani, 2016)

Source credibility

Many authors have investigated the positive impact of online reviews on sales of products and services. However, given the importance of source credibility, I believe more research is needed on trustworthiness of reviewers as an important construct. The source credibility theory explains how a recommendation persuasiveness is affected by the perceived credibility of its source. Actually, customers accept reviews depending on the perceived trustworthiness of the reviewer, which consequently impacts the buying decision. Reviewer trustworthiness is therefore an important moderating variable that positively moderates the impact of review-based online reputation. (Banerjee, Bhattacharyya, & Bose, 2017)

Concluding, instead of solely increasing the number of (positive) customer reviews, online retailers should also build a good review-based online reputation that encourages and identifies top trustworthy reviewers and that ranks reviews based on reviewer trustworthiness.

This post was inspired by: Hajli, N. (2015). Social commerce constructs and consumer’s intention to buy. International Journal of Information Management, 183-191

References:

Banerjee, S., Bhattacharyya, S., & Bose, I. (2017). Whose online reviews to trust? Understanding reviewer trustworthiness. Decision Support Systems, 17-26.

Bloem, C. (2017, July 31). 84 Percent of People Trust Online Reviews As Much As Friends. Here’s How to Manage What They See. Opgehaald van Inc.: https://www.inc.com/craig-bloem/84-percent-of-people-trust-online-reviews-as-much-.html

Cipriani, J. (2016, March 14). Why You Shouldn’t Trust All Amazon Reviews. Opgehaald van Fortune: http://fortune.com/2016/03/14/paid-amazon-reviews/

DeMers, J. (2015, December 28). How Important Are Customer Reviews For Online Marketing? Opgehaald van Forbes: https://www.forbes.com/sites/jaysondemers/2015/12/28/how-important-are-customer-reviews-for-online-marketing/#35eccc711928

Grosman, L. (2017, February 28). Five Tips To Improve Your Ranking On Amazon. Opgehaald van Forbes: https://www.forbes.com/sites/forbescommunicationscouncil/2017/02/28/five-tips-to-improve-your-ranking-on-amazon/#3079c5f89fed

Hajli, N. (2015). Social commerce constructs and consumer’s intention to buy. International Journal of Information Management, 183-191.

Silverman, D. (2017, April 20). A Matter of Trust: Amazon Declares War on Fake Product Reviews. Opgehaald van Clavis Insight: https://www.clavisinsight.com/blog/matter-trust-amazon-declares-war-fake-product-reviews

Business Case, News

Using a ‘healthy dose of guilt’ to achieve your goals

March 10, 2017 aradavording Leave a comment

Over the years many different types of social online communities have gained popularity. It has allowed for individuals with widely differing interests to connect and interact with others that share common interests. Think of CouchSurfing, Facebook, Reddit, and SoundCloud, among many, many others. For those that are rather goal-oriented and keen on connecting with others that share a similar mindset, Linkagoal is the optimal social network.

Linkagoal is a social online community based on the premise of sharing personal goals and connecting individuals based on related life goals and ambition. On this social network users can engage with other goal-driven users. Besides sharing your own goals with the community, you can connect with members who can assist you in achieving your goals, or with people that are currently trying to achieve a similar goal. Linkagoal’s underlying belief is that barriers such as the lack of resources, guidance, experience, accountability, and encouragement, are what keep humans from reaching their goals. Thus, why not build an online community to make it easier for people to overcome these obstacles and achieve their ultimate goals. (ACN Newswire, 2014)

The online community takes on a simple, yet unique approach to foster goal-attainment of their users. Firstly, new members can create a goal and explicitly state what it is that they want to accomplish. Secondly, individuals are encouraged to share a post with other community members regarding their past and present events. The third aspect is called Progress Update, which entails that users keep the community up to date on their progress towards their goal. Fourthly, users are encouraged to create milestones, in order to help them stay on track. Moreover, members are expected to motivate others in attaining their goals. Furthermore, users can build their own mini-community by linking their goals to other similar goals. In addition, individuals can contribute to the attainment of other members’ goals by offering their knowledge and experience. Lastly, the social network offers a private messaging, so members can stay connected with their friends. (Linkagoal, 2017)

Despite their good intensions, Linkagoal has received quite some backlash for their claim that a ‘healthy dose of guilt’ provides ‘just the right amount of pressure’ to keep users on track. However, mental-health experts have condemned this approach, as they believe it could have detrimental effects on individuals. Furthermore, Linkagoal partnered with YouGov to explore drivers of motivation, especially regarding annual goals. They found that nearly 62 percent of social-media users feel a higher level of pressure to stay on track when others can see their progress. It is exactly this belief that experts find disturbing. Rather than ‘avoiding the negative, i.e. the threat of others knowing you have failed’, they believe Linkagoal should ‘encourage and reinforce the positive’. (Mail Online, 2016)

Nevertheless, the social network has a strong community base of over 2 million members, which is expected to grow even further. Therefore, the social network is primarily focusing on monetization, with the rollout of mentorship services, rewards, and goal campaign features in the near future (The Silicon Review, 2016). Furthermore, Linkagoal is available as an app on both Google Play and the App Store.

Who knows, maybe Linkagoal will one day join the ranks of Facebook or Twitter, only time will tell.

References

ACN Newswire. (2014). Linkagoal Secures $1.25M in Series A Funding. [online] Available at: http://www.acnnewswire.com/press-release/english/16486/linkagoal-secures-$1.25m-in-series-a-funding [Accessed 10 Mar. 2017].

Linkagoal. (2017). Linkagoal | Share Your Life Goals. [online] Available at: https://www.linkagoal.com/ [Accessed 10 Mar. 2017].

Mail Online. (2016). Experts hit out at ‘guilt and shame’ goal share websites. [online] Available at: http://www.dailymail.co.uk/health/article-3602375/Experts-hit-guilt-shame-goal-share-websites-Networking-sites-slammed-detrimental-mental-health-effects.html [Accessed 10 Mar. 2017].

The Silicon Review. (2016). The Goal Based Social Network: Linkagoal, Inc.. [online] Available at: http://thesiliconreview.com/magazines/the-goal-based-social-network-linkagoal-inc/ [Accessed 10 Mar. 2017].

Articles, Opinion

The number of Facebook friends on crowdfunding success

April 2, 2015 joostmartijndekok Leave a comment

(*This entry is based on the research article ‘The Dynamics of Crowdfunding – An Exploratory Study’ by Ethan Mollick)

In order to make something work, one aims to find a recipe for success. This principle holds for crowdfunding, too, in which founders of all sorts of projects request funding from many individuals, often in return for future products or equity (Mollick, 2014). Many crowdfunding projects, however, fail. Therefore, it is of importance to find out the underlying dynamics of success and failure among crowdfunding ventures. This is exactly what Ethan Mollick, Professor of Management at Wharton University of Pennsylvania and author of The Dynamics of Crowdfunding – An Exploratory Study, has done. By analysing a dataset containing 48,500 crowdfunding projects with a combined funding over $237 M, Mollick researches the effects of a fund seeker’s personal network, underlying project quality and geography on successful fundraising. In this post, I will focus attention on the effect of a fund seeker’s personal network through the notion of one’s number of Facebook friends. Then, I’ll show how this looks like in practise on Kickstarter.com. Finally, I suggest a way in which the power of an entrepreneur’s personal network could be even better put to use.

(Professor Ethan Mollick)

Social capital

Social networks have long played an important role in the funding of new ventures (Hsu, 2007; Shane and Cable, 2002). An entrepreneur’s social network influences the succes of raising capital, as it provides (1) connections to funders and resources as well as (2) endorsements of project, its product or service, and the initiator (Shane and Cable, 2002; Sorensen and Fassiotto, 2011; Stam and Elfring, 2008). Actually, an entrepreneur’s social network is the initial source of funding, called friends and family money (Agrawal et al, 2010). As Mollick found, about one in three Kickstarter.com accounts are linked to social network Facebook. Hence, the author looked at Facebook friends of founders (FBF) for the project initiator, as this number is less likely to increase as the project progresses. Here, FBF is a measure of the size of a founder’s social network. Models 2 and 5 in Mollick’s results (see table below) show that social network size predict success. According to the author, the link between social network size and crowdfunding succes could be compared to the following. Having just 10 Facebook friends leads to 9% chance of succes, whereas a 100 Facebook friends lead to 20% of success. With 1000 Facebook friends denoted on Kickstarter.com, a fund seeker has 40% change of success. However, Model 6 in Mollick’s results (see table below) shows that having no Facebook account coupled to Kickstarter.com is yet better than just having few online connections. This suggests that, although larger networks generally lead to more success in fundraising, entrepreneurs yet need to strategize on whether or not linking their social network to their fundraising, based on the number of friends they have on Facebook.

If you are interested in how the number of Facebook friends is depicted on Kickstarter.com, visit:

https://www.kickstarter.com/projects/snappower/the-snaprays-guidelight-illuminate-your-life?ref=nav_search.

Here you see the SnapRays project on Kickstarter.com by entrepreneur Jeremy Smith. Click on Jeremy’s photo on the right to view his profile. The number of Facebook friends is depicted on the right.

A suggestion

Could an entrepreneur’s social network be leveraged more as to earn more trust among investors and hence raise more capital? In addition to stating the number of the fund seeker’s Facebook friends, the crowdfunding platform could enable the fund seeker to show the number of steps and the actual relations between him or her and a particular potential funder the way LinkedIn depicts the relations between you and someone else. To get an idea, see the mock-up I made below. To my belief, this would give a potential funder a feeling of being ‘more connected’ to the fund seeker, hence it would raise trust and it might lead to more funding.*

*Note: I e-mailed Professor Ethan Mollick about this suggestion. I’ll update this post if he replies.

Your turn

Now, could you think of other reasons why the number of Facebook friends is a quality signal to potential investors? And could you imagine different ways in which a fund seeker’s personal network could be leveraged more on crowdfunding platforms? Let me know you thoughts in the comments below.

References

Agrawal, A., Catalini, C., Goldfarb, A., 2010. The geography of crowdfunding. SSRN Electronic Journal.
Hsu, D., 2007. Experienced entrepreneurial founders, organizational capital, and venture capital funding. Research Policy 36.
Mollick, E., 2014. The Dynamics of Crowdfunding – An Exploratory Study. Journal of Business Venturing 29, 1-16.
Shane, S., Cable, D., 2002. Network ties, reputation, and the financing of new ventures. Management Science 48, 364.
Sørensen, J., Fassiotto, M., 2011. Organizations as fonts of entrepreneurship. Organization Science 22, 1322–1331.
Stam, W., Elfring, T., 2008. Entrepreneurial orientation and new venture performance: the moderating role of intra-and extra industry social capital. Academy of Management Journal 51, 97–111.