Crowd funding
Content
Crowdfunding: Motivations and Deterrents for Participation
ELIZABETH M. GERBER and JULIE HUI, Northwestern University
Crowdfunding is changing how, why, and which ideas are brought into existence. With the increasing number of crowdfunded projects, it is important to understand what drives people to either create or fund these
projects. To shed light on this new social phenomenon, we present a grounded theory of motivation informed
by the first cross-platform qualitative study of the crowdfunding community. By performing 83 semistructured interviews, we uncover creator motivations, which include the desire to raise funds, expand awareness
of work, connect with others, gain approval, maintain control, and learn; and supporter motivations, which
include the desire to collect rewards, help others, support causes, and be part of a community. We also explore
deterrents to crowdfunding participation, including, among creators, fear of failure, and, for supporters, lack
of trust. Based on these findings, we provide three emergent design principles to inform the design of effective
crowdfunding platforms and support tools.
Categories and Subject Descriptors: H.5; K.4.3.
General Terms: Crowdfunding, Crowdsourcing, Motivation, Online Community, Design
Additional Key Words and Phrases: Creative work, innovation, psychology
ACM Reference Format:
Elizabeth M. Gerber and Julie Hui. 2013. Crowdfunding: Motivations and deterrents for participation. ACM
Trans. Comput.-Hum. Interact. 20, 6, Article 34 (December 2013), 32 pages.
DOI: http://dx.doi.org/10.1145/2530540
1. INTRODUCTION
Crowdfunding—the online request for resources from a distributed audience often in
exchange for a reward—provides a new way for individuals and teams to solicit financial
support from a distributed audience. Unlike traditional fundraising methods, such as
applying for funds from banks or foundations, crowdfunding allows creators, people
who request resources, to appeal for funds directly from supporters, people who give
resources, through online platforms [Gerber et al. 2012].
Since the first crowdfunding platform was launched in 2001 [Wharton 2010], crowdfunding has supported a wide range of project types and fundraising goals, from video
game designers who raised more than $1,000,000 from 60,000 supporters to create a
game console [Kickstarter 2012], to product designers who raised over $30,000 from
2,000 supporters to produce an eco-friendly pencil [Kickstarter 2012], to an architect
who raised $4,000 from 100 people to improve a local park [Kickstarter 2011].
Today, there are 452 platforms across the world, which together channeled
$1.47 billion in donations in 2011 [Esposti 2012]. Crowdfunding platforms charge fees
for processing donations, resulting in over $60 million in revenue for crowdfunding
Authors’ address: Elizabeth M. Gerber and Julie Hui, Northwestern University, 2133 Sheridan Drive,
Evanston, IL 60201.
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DOI: http://dx.doi.org/10.1145/2530540
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Fig. 1. A supporter considers donating $10 to a campaign creator who had already raised $200,000 to design
and manufacture an iPhone flashlight app.
platforms. Despite the rapid growth of the online community of creators and supporters linked by crowdfunding platforms, our understanding of this new social
phenomenon is limited. To gain much-needed insight, we designed and implemented a
qualitative study to understand this emerging online community. Our research seeks
to answer the following question: What Motivates and Deters Participation in
the Crowdfunding Community?
By understanding motivations and deterrents, as human computer interaction researchers, we can identify opportunities to refine and redesign crowdfunding platforms
to improve the user experience and to better recruit and sustain participation in this
rapidly growing community [Kraut and Resnick 2011].
We organize this article into three sections. The first section introduces crowdfunding
and related research. The second section presents our findings, identifying motivations
and deterrents from both the creators’ and supporters’ perspective. The third section
offers emerging design principles to inform the design of crowdfunding platforms and
support tools.
2. CROWDFUNDING
Crowdfunding is derived from the broader concept of crowdsourcing, the outsourcing of
problem-solving tasks to a distributed network of individuals [Howe 2006]. Crowdfunding makes it possible for those with limited access to traditional sources of financial
backing, such as banks or venture capitalists, to acquire financial resources necessary
to pursue their projects. Through online transactions, crowdfunding also gives people
with disposable income a new way to give to others and “invest” in projects that might
not happen without their financial support (see Figure 1).
Popular crowdfunding platforms such as Kickstarter, IndieGoGo, and RocketHub
rely on existing web-based payment systems like Amazon Payments to facilitate the
exchange of resources between creators and supporters.1 Crowdfunding platforms provide dedicated project pages, analytics and project monitoring, and tutorials prior to
1 Online crowdfunding platforms differ in their use of terminology, referring to people who request
funds as “creators,” “creatives,” “designers,” “inventors,” or “activists” [Lambert and Schwienbacher 2010;
Landler 2012]. People who pledge funds are referred to as “backers,” “fuelers,” or “funders” [Lambert and
Schwienbacher 2010; Landler 2012]. In this article, we refer to people who request funds as “creators” and
people who provide resources as “supporters.”
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Fig. 2. Kickstarter project page for a coffee accessory including a video, written description, links to social
media, contact information, status updates on number of “backers,” dollars pledged, and time remaining in
campaign.
and throughout the campaign. Creators also rely on additional social media platforms
like Facebook and YouTube to publicize their request for funds from supporters.
To launch a crowdfunding campaign on an online platform, creators engage in five
types of work [Hui et al. 2014]. First, they prepare the campaign material. Preparation
involves creating a project profile, which typically includes a title, video, description
of planned use of funds, funding goal, campaign duration, and reward descriptions.
Creators fill out these recommended and required fields online, and if the project is approved by the platform, the platform presents their work in a preformatted page where
visitors can choose to donate (see Figure 2). Next, they test their campaign material. In
this stage, creators solicit feedback on their video and campaign description as well as
engage their audience in deciding the design direction. Third, they publicize the project
during the live campaign. Publicizing involves reaching out to potential supporters to
request support. Creators use a variety of means to reach potential supporters, including the crowdfunding platform itself, email, and online social media, as well as offline
communication technologies and in-person requests. Once the campaign is over, they
follow through with their proposed project. This stage of work involves producing and
delivering the promised rewards [Hui et al. 2014]. Rewards range from having one’s
name acknowledged in the movie credits, to getting the new crowdfunded product, to
receiving a simple “thank you” email from the creators. While some may consider these
four stages as all the stages of crowdfunding work, we also identify that many creators
also go on to contribute back to the community by providing advice and funding other
projects.
For example, two friends with an idea but no connection to capital raised $306,944 in
37 days to develop a coffee accessory on Kickstarter, a popular crowdfunding platform
[Kickstarter 2011]. In the process of crowdfunding, they explained in a video and
written description how their accessory worked, marketed the product through the
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crowdfunding platform and social media, engineered the product, and delivered the
final product to 4,818 supporters.
Online crowdfunded projects vary in scope and span across many fields, including
art, comics, dance, design, fashion, film, food, games, music, photography, publishing,
technology, theater, science, and service. Amounts raised range from a couple dollars
to over $10 million dollars. The percentage of people who reach their goal on the most
popular crowdfunding platform, Kickstarter, is 43% [Kickstarter 2011].2 Regardless of
whether the goal is met, creators maintain intellectual property.
Crowdfunding platforms employ two different funding models: all or nothing or all
and more. The all-or-nothing funding model, employed by Kickstarter, requires all
funds to be returned to the supporters if the creators do not reach their stated goal
[Kickstarter 2013]. The all-and-more funding model, employed by RocketHub allows
creators to keep all funds even if their funding goals are not achieved [RocketHub
2013; IndieGoGo 2013]. If the goal is reached, platforms require the creators to pay a
platform usage fee to the crowdfunding platforms for services (between 3% and 9% of
funds raised) and payment processing fee (between 3% and 5% of funds raised) to an
established online payment processing system, such as Amazon Payments or PayPal
[Kickstarter 2013; RocketHub 2013; IndieGoGo 2013].
3. RESEARCH ON CROWDFUNDING
Despite the growing popularity of crowdfunding, there is little scholarly research in
this domain. Economists have noted that crowdfunding avoids some of the barriers
that can impede offline financial transactions and that crowdfunding can be used
by creators to disseminate product information, increase consumer awareness, and
estimate consumer willingness to pay [Belleflamme et al. 2010]. Crowdfunding can
also provide insight into the experience goods market, where some have argued that
participation is governed more by peer effects than network externalities [Ward and
Ramachandran 2010].
Despite the link between motivation and contributions to online communities [Kraut
and Resnick 2011], few HCI scholars have investigated motivations for crowdfunding
through online platforms. In a 2010 study, Lambert and Schwienbacher analyzed results from a questionnaire taken by 21 entrepreneurs, only three of whom used an
online platform to seek funding [Lambert and Schwienbacher 2010]. The remaining
18 entrepreneurs used personal websites and other online social media tools to crowdfund. Lambert and Schwienbacher concluded that entrepreneurs were motivated to
raise money, get public attention, and obtain feedback. In addition, Schwienbacher
and Larralde also performed a case study of one company that raised money using
crowdfunding techniques [Schwienbacher and Larralde 2010]. Through one interview
with the company founder and a survey questionnaire taken by company supporters,
Schwienbacher and Larralde concluded that the creator participated in crowdfunding
not only to raise funds but also to expand his network, while supporters expressed the
desire to partake in the “exciting adventure of building a startup” and also to expand
their network with other supporters.
In an exploratory study, Muller and colleagues at IBM Research allocated money
to 511 employees at IBM Research to better understand “enterprise crowdfunding”—
or crowdfunding within an enterprise [Muller et al. 2013]. The research team asked
employees to “spend” money on employee-initiated proposals posted on an intranet site.
The trial resulted in proposals that addressed diverse individual and organizational
needs with high participation rates. Further, they found that “enterprise crowdfunding”
supports interdepartmental collaboration, including the discovery of large numbers of
2 Success
rates for other platforms are not publicly available.
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previously unknown collaborators and the development of organizational goals [Muller
et al. 2013].
Our work extends prior research by exploring the factors that motivate or deter participation among crowdfunding creators and supporters. In this study, we investigate a
sample of online crowdfunding users who either launch or fund projects on crowdfunding platforms. By studying independent creators and supporters who use crowdfunding
platforms, we hope to gain a broader understanding of the community. Findings from
our research can inform the design of new tools to support the growth of crowdfunding
platforms.
4. RELATED RESEARCH
Crowdfunding combines elements of online philanthropic behavior, online consumer behavior, online peer-to-peer lending, and online peer production. Therefore, we examine
research from psychology, marketing management, economics, information science, and
human computer interaction. In each case, we seek to sharpen our theoretical expectations for why people choose to participate or refrain from participating in crowdfunding.
4.1. Online Philanthropic Behavior
Online philanthropy is online giving of financial and social capital to promote human
welfare. Researchers find that supporters are motivated to give because of feelings of
sympathy and empathy toward the cause [Rick et al. 2007], feelings of guilt for not
giving [Cialdini et al. 1981], and hopes of strengthening their social identity [Aaker
and Akutsu 2009] and social status [Becker 1974; Glazer and Konrad 1996]. Management scholars find that nonprofit organizations are motivated to fundraise online
predominately because it allows for the easy and safe transfer of funds from donors
[Waters 2007]. Many crowdfunding projects are framed as philanthropic, and as such
we expect some of the same motivations to figure into crowdfunding as they do in online philanthropy. For nonphilanthropic crowdfunding projects, we expect feelings of
empathy and guilt to be less relevant, while social identity and social status concerns
may figure more prominently.
4.2. Online Consumer Behavior
Crowdfunding can be framed as a type of market, where creators produce and market their ideas or products and supporters consume them. Thus, aspects of marketing
and consumer research are relevant to understanding motivations for participants in
crowdfunding. Psychologists and marketing scholars find that goals, information and
affective processing, involvement [Jenkins 2009], and perceptions of choice [Iyengar
and Lepper 2000] are key drivers of the consumer decision process. Research in information systems and management find that online consumption is facilitated by
perceptions of Internet security and by navigation functionality [Chellappa and Pavlou
2002; Kim et al. 2011; Sefton 2000; Miyazaki and Fernandez 2001]. Many of these
relationships interact with context and user type: economists, for instance, find that
novice Internet users make purchase decisions based on brand recognition but become
less trusting of brands as they become more proficient with Internet searching [Ward
and Lee 2000].
Similar to e-commerce, crowdfunding platforms allow supporters to safely and easily
exchange financial resources for a particular product, service, or experience again
and again. Unlike on e-commerce platforms, such as on Amazon.com, crowdfunding
supporters often pay to receive a product many weeks or months prior to its production,
and there is always a risk the product will not come into being at all. We expect concerns
about trust to be relevant for crowdfunding supporters who give in exchange for a
specific reward.
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4.3. Online Peer-to-Peer Lending
The interpersonal creator-to-supporter intimacy that exists on crowdfunding platforms
also resembles elements of peer-to-peer lending, another nascent phenomenon similar
to crowdfunding, in which individuals bid on microloans sought by individual borrowers. Like crowdfunding, few peer-to-peer lending sites existed before 2005, and thus
scholarly research on the phenomenon is currently scant. Like peer-to-peer lenders,
supporters on crowdfunding platforms take a financial risk when giving money to a
project creator. Unlike peer-to-peer lending sites, supporters do not expect to be repaid monetarily. With regard to the motivations that drive individuals to engage in
peer-to-peer lending, scholars of information science and computer science find people
are more likely to lend money to peers who share reputable hard information in their
extended network [Lin et al. 2009], such as those with a good credit score [Potzsch and
Bohme 2010]. These researchers find that soft information, such as personal information, leads to a more positive perception of the borrower, but it is not enough to reduce
borrowing interest rates [Potzsch and Bohme 2010].
4.4. Online Peer Production
Among the phenomena we have addressed thus far, online peer production for crowdsourced platforms, such as Wikipedia, is the one where scholars have shown the most
interest in understanding the issues of motivation for participating online. Both the apparent surprise of individuals working without financial compensation and the prospect
of leveraging the collective intelligence and efforts of the crowd to tackle the world’s
problems have attracted the observed scholarly attention [Malone et al. 2009]. Scholars
have identified a variety of motivations for contributing to online communities including participants’ anticipation of learning, increased social standing, peer companionship and approval, autonomy, and the prospect of improving society [Kraut and Resnick
2011]. While the aforementioned motivations are all located in the individual, scholars
have also noted a variety of relational mechanisms that affect participation; these include recruiting and clustering similar others to increase identity-based commitment,
careful socialization and integration of newcomers, encouraging commitment over time,
and coordinating contributions to maximize benefits for the community [Resnick and
Kraut 2011].
While this research has highlighted the critical role of recruiting and retaining members of voluntary and “free” online communities primarily organized around knowledge
sharing, few researchers have examined the role of recruiting and retention in the
crowdfunding context, which is characterized by the sharing of information and financial resources in exchange for rewards. Like communities built on peer production, we
expect that crowdfunding platforms rely on similar individual and relational mechanisms to motivate creator and supporter participation.
5. METHOD
5.1. Study Design
We followed a grounded theory approach and performed semistructured interviews
with a representative sample of participants from the crowdfunding community, a
common method in qualitative studies in human computer interaction [Bailey and
Horvitz 2010]. As is typical with grounded theory [Glaser and Strauss 1967], this
study was initiated with open qualitative data collection. Given the limited research
in this domain, we did not want to propose specific hypotheses about what was to be
found and unnecessarily constrain the emergent framework by precisely identifying
and operationalizing variables [Glaser and Strauss 1967]. The study was framed with
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a broad research question: What motivates and deters creators and supporters
from participating in crowdfunding?
An examination of a diverse set of participants including all types of creators and
supporters from multiple platforms and project categories in the crowdfunding community is needed to provide a rigorous framework for why people create and support
projects on crowdfunding platforms. Gathering contextual details about motivation will
inform our three empirically grounded design principles for crowdfunding.
5.2. Participants
We interviewed 83 US-based participants (21 women) over an 11-month period. Two
participants had exclusively created projects; 10 participants had exclusively funded
projects; 48 participants had both created and funded projects. We also interviewed 20
participants who considered participating in crowdfunding (as a creator or supporter)
but decided against it.
Creators launched projects from the categories of Art (7), Comics (1), Dance (1), Design (15), Education (1), Fashion (2), Film & Video (7), Food (4), Games (10), Music
(3), Photography (3), Publishing (6), Science (4), Technology (1), and Theater (3), which
cover the main categories on the crowdfunding platforms that we observed. Approximately 50% of project creators met their fundraising goal on at least one of their
projects. Thirteen creators launched more than one campaign, ranging between one
and nine campaigns per creator interviewed. Most creators held a full-time profession
outside of their campaign while dedicating between 30 minutes and 11 hours a day
on weeknights or weekends working on their crowdfunding project. Three informants
relied on launching crowdfunding campaigns as their primary source of income. Creator ages ranged from 20 to 52 years and creators raised between $71 and $313,371.
Supporters funded projects from all the main categories on the crowdfunding platforms that we observed, supporting between one and 81 projects with a mode of one.
Supporter ages ranged from 20 to 59 years, and supporters donated between $5 and
$250 dollars with a mode of $10. We find that our sample of crowdfunding participants
is representative of the crowdfunding population [Kickstarter 2013].
We selected participants from Kickstarter, RocketHub, and IndieGoGo because they
are the most popular and successful platforms in the United States [Alexa 2013]. Fifty
percent of participants were recruited through random sampling and 50% through
snowball sampling, which allowed us to identify both typical and unique members of
the community. Participants were not compensated for their participation.
5.3. Procedure
We used semistructured interviews to collect data. Each interview began with an
explanation of the method and a description of our research interest in crowdfunding.
We explained that we would be recording and transcribing interviews, and that we were
not paid consultants or evaluators for any crowdfunding platform. We guaranteed that
no informants’ names, titles, project titles, or positions would be revealed. We reiterated
our commitment to objective recording and anonymity throughout the data collection.
Our semistructured interview protocol was divided into three sections. In the first
section, we asked participants about their professional background and the project with
which they were involved. During the second phase, we asked participants to describe
their introduction to crowdfunding platforms and current involvement. During the
third and final phase, we asked them their motivations to make the choices they made
and to share any additional comments.
The average length of the interview was 30 minutes. Sixty-four of the interviews
were conducted over Skype or phone due to the wide geographic distribution of participants. The remainder of the interviews were conducted face to face. All interviews were
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audio-recorded and transcribed for analysis immediately following the interviews. Interviews were conducted at different stages of the crowdfunding process (before, during,
and after their campaign) to understand if motivations differed over time. The advantage to this research approach is the ability to collect in situ data, not just reflective
data; the disadvantage is that bias is introduced through self-report and participant
observation [Spradley 1980].
5.4. Data Analysis
We employed selective coding and analysis [Spradley 1980] to understand what motivated or deterred participation in crowdfunding. First, we began a process of selective
coding in which we flagged each instance where informants communicated motivations
or deterrents. After identifying all of the instances, we clustered motivations and deterrents into conceptual categories. Simultaneously, we researched pertinent literature to
understand existing theory and uncover related phenomena. Initial data analysis began after 14 interviews. The remaining interviews were used to gather data pertaining
to emergent themes [Mintzberg 1979]. Moving between inductive and deductive thinking, we uncovered motivations and deterrents for participation. This iterative process
allowed for the development of initial inferences. We reviewed all relevant data and
evaluated the strength of our evidence to inform whether inferences should be modified
or abandoned based on insubstantial evidence. Coding was performed in parallel cycles
where two researchers independently identified codes based on emergent themes. Both
researchers then met once a week to compare codes and establish agreement. This
pattern was repeated until all interviews were reviewed and the categories of themes
stabilized and enforced with quotes.
The next section presents these themes grounded in data collected during the interviews. All quotations are directly transcribed from interviews without grammatical
corrections. We believe these themes present a grounded theory for why people are
motivated to participate or deterred from participating in crowdfunding.
6. CROWDFUNDING MOTIVATIONS AND DETERRENTS
We present evidence from the semistructured interviews with the creators, supporters,
and those who chose not to participate. First, we discuss motivations to become a creator, including a desire to raise funds, expand awareness of work, connect with others,
gain approval, maintain control, and learn. Second, we present findings on motivations
for supporters, including a desire to collect rewards, help others, support causes, and
be part of a community. We conclude with findings on deterrents for participation in
crowdfunding. While we categorize motivations and deterrents as distinct from each
other, in reality, they are interrelated [Reiss 2004]. We present the findings in the order
of prevalence for creators and supporters (Table I).
6.1. Motivations to Become a Creator
6.1.1. Creator Motivation: Raise Funds. Creators are motivated to use crowdfunding platforms because it provides an easy, efficient, organized way to solicit and collect financial
support from many people in a distributed network. By using web-based technologies,
such as online payment systems and social media, creators are able to market and solicit resources safely and easily through crowdfunding platforms. A creator of a theater
project described:
“[Crowdfunding] was good for us because we didn’t have a way to collect money.”
Crowdfunding is particularly useful for people who are unable to get financial support
from traditional funding sources, such as banks, angel investors, and venture capitalists. Instead of raising a large sum of money from one person or organization, creators
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Table I. Motivations and Deterrents to Crowdfund for Creators and Supporters
Creator
Supporter
Motivations
Raise Funds
Expand Awareness of Work
Form Connections
Gain Approval
Maintain Control
Learn New Fundraising Skills
Collect Rewards
Help Others
Be Part of a Community
Support a Cause
Deterrents
Inability to Attract Supporters
Fear of Public Failure and Exposure
Time and Resource Commitment
Distrust of Creators’ Use of Funds
report being able to raise similar sums of money through a large number of supporters
contributing small sums. A creator of an educational toy explained:
“Instead of having one or two angel investors or manufacturers, you have like 50,000 micro-investors.”
In addition, unlike applying for grants, which are not always approved, certain crowdfunding platforms, such as IndieGoGo and RocketHub, allow creators to keep all of
the funds they raise. A researcher described his return on investment by launching a
crowdfunding campaign:
“I’m batting 100% in terms of getting a couple of thousands of dollars.”
Some creators are also motivated by the potential to raise funds quickly—perceiving
crowdfunding as less time consuming than some other traditional fundraising methods, such as holding a fundraising event. A choreographer who raised approximately
$16,000 on a crowdfunding platform reported:
“[A fundraising event includes] an auction, entertainment, food, bar, getting the space, decorations, invitations. All that easily takes 100 hours. The [crowdfunding] campaign took somewhere between 40–
50 hours. There’s no way you could do an event for that little time.”
A game designer explained that other fundraising sources required extensive applications and if approved, required months of waiting before actually receiving the funds.
He described how he was motivated to crowdfund because the financial response was
more immediate:
“We needed to make a lot of money . . . in a short period of time, and we didn’t have enough time to reach
out to a foundation, or a grant or whatever . . . they told us we had to fill out a bunch of forms. It was just
so complex; We decided . . . let’s just go straight to the people.”
The game designer was motivated by not only the potential speed of receiving funds
but also the idea that supporters were able to choose or not choose to give.
“It feels, you know, democratic. They can choose to give or not to give.”
Creators are motivated to participate in crowdfunding because they were able to
request and receive financial support directly from many individuals in a distributed
network. Creators perceived the method as efficient, given their limited time, and fair
to people in their network who may decide to give or not give. These transactions are
made possible by web technologies such as online payment systems and crowdfunding
platforms.
6.1.2. Creator Motivation: Expand Awareness of Work. In addition to raising financial resources, creators are motivated to expand awareness of their work by publicizing their
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crowdfunding project. Unlike traditional fundraising methods in which only the application reviewers read about the project, crowdfunding provides an avenue for anyone
on the Internet to view one’s project through a brief video and written description.
Creators expand awareness by posting links to their project in social media and sending emails about their campaign to friends, family, and news media outlets. A dance
project creator described how crowdfunding provided dual benefits of raising funds and
spreading awareness:
“[Crowdfunding] is actually a really great way that we got more people to learn about our project. You do
[crowdfunding] to fundraise, but you also do it for marketing to let people see [sic] about your project.”
Another creator of a mobile app project described how he used crowdfunding solely
to spread the word about and distribute his project:
“We didn’t even really care if we got money because [our product] is such an insanely low cost thing to
run. So, we ended up just doing crowdfunding in order to get [our product] out.”
We found that some creators were motivated to use crowdfunding because of the
potential to receive attention from the popular press. An anthropological researcher
described how she was motivated to use her crowdfunding campaign to expanded
awareness of her research beyond her academic peers:
“CNN covered [my research], and Forbes covered it. And then everything just went crazy after that. . . .
These are things that don’t normally happen if you just have a grant proposal, or you have an article in
the journal, you know, that maybe nobody reads.”
By reaching out to the general public through news media, crowdfunding allows
people to raise awareness with people with whom they are not closely connected. These
people have the ability to reach new groups of people with whom the creator is not
directly connected [Granovetter 1973]. In the popular press, creators advise reaching
out to many different audiences to amplify their reach [Burt 1992]. A creator who
posted her nonfiction writing project on a crowdfunding platform explained:
“I really wanted to use it more as a way of sharing the project with a different audience. Most of the
donors are not really like my closest friends. They’re kind of on the outer rings of my universe.”
Creators are motivated to expand awareness of work beyond the close social network.
With crowdfunding, creators are given the opportunity to market their projects to the
general public through social media and popular press.
6.1.3. Creator Motivation: Form Connections. In addition to raising funds and expanding awareness of work, our data suggests that creators are motivated to engage in
crowdfunding to connect with people through a long-term interaction that extends well
beyond a single financial transaction. Because crowdfunding platforms store supporter
contacts and provide online messaging services, creators are able to easily communicate with supporters in answering questions and giving project updates. A creator of a
board game project described his connection with supporters:
“[The funding process] creates a longer-term connection to people that, you know, weeks later, months
later, you’re still interacting, and they are expecting to get something. . . . You can build relationships with
people, you know, over the course of time.”
Such long-term interactions allow creators to collaborate directly with supporters,
engaging them in the creative process. A product designer asked his supporters which
color binding they preferred for his winter sports gear product after showing them pictures of the production prototypes in a project update. A creator of a community design
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project described her preference for consumer engagement throughout development.
She noted:
“[Participating in crowdfunding] made me realize that I don’t want my projects to be like only mine. . . . I
want others to share in my projects.”
Crowdfunding platforms provide an easy avenue for communication and financial
transactions between creators and a large group of people. For instance, some creators
use crowdfunding to find more interested consumers in an effort to presell their product.
One creator of a product design project reported:
“[My project partner] already had enough interest that she knew that she wanted to go [through] with
manufacturing. Essentially, we used crowdfunding to generate more preorders.”
In contrast to traditional marketing methods, crowdfunding provides a quick and
alternative way to advertising a product and building a fan base. A creator of a game
project explained:
“You’re building this group of people who are very enthusiastic about your idea. It can take years for a
company to develop a fan base, but [with crowdfunding], you get these people who get in on the ground
floor.”
The long-term relationship stands in contrast to the short-term relationship that
occurs in many online financial transactions, such as buying a product on the Amazon
marketplace. However, this desire for social contact and peer companionship is consistent with many online communities that are not focused on financial transactions,
such as online discussion communities [Kraut and Resnick 2011].
Creators are motivated to make connections with not only their supporters but also
other creators, which they see as similar to themselves. One creator described the
experience of meeting a fellow creator:
“There’s definitely . . . a secret handshake. . . . If you met someone who created a [crowdfunding] project,
you immediately have something to talk about. . . . You can cut through any degree of small talk and talk
about . . . something you really, truly care about.”
The shared experience of crowdfunding connects creators on- and offline and allows
for collaboration and informal learning. An interaction designer describes his relationship with other creators online:
“It’s a give and take. Like, they ask me for advice and I look at their projects for advice. . . . Every week
or so, somebody emails me asking questions about [crowdfunding], like, ‘My project got rejected by [a
crowdfunding platform], how do I redo it?’ And I’m like, you need to change this, this and this. . . . I can
help you with that.”
In summary, creators are motivated to participate in crowdfunding because they can
expand their fan base and connect socially with like-minded people through an extended period of online engagement. Creators form connections through crowdfunding
platform communication mediums, through social media, and face to face.
6.1.4. Creator Motivation: Gain Approval. In addition to raising funds and awareness and
establishing connections, the data suggests that creators are also motivated to satisfy
a desire for approval—both for the self and for their work. The number of supporters
and amount of dollars raised are often seen as a quantification of the value of one’s
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project. A writer describes how the community’s approval increased her confidence in
her work through online conversation:
“You sort of wonder if people are going to like you and like your work, and so I definitely got more
confident once people were clearly interested in it and clearly engaging in the dialogue and supporting
me financially.”
In some cases, the desire for approval was a higher priority than the desire for funds.
A nonfiction project creator commented on how community support gave her confidence
to complete the project:
“The funny thing is, I probably gave other people as much money as I’ve just made on this [crowdfunding]
campaign. So, I could have kept that money in my pocket. But, the whole thing is like, a load of confidence.”
Creators seek funds from a community of people who care not just about the project,
but also about the individual’s success. People’s beliefs in their ability increase when
they have successful experiences and receive public recognition of their success [Lin
et al. 2009]. A creator describes how crowdfunding provided validation:
“You are embedding yourself in an active community. . . . You are being validated. . . . Friends and families
become evangelists for you. . . . You have people saying, I believe in you.”
Online encouragement and financial backing supports perceptions of approval, which
strengthens beliefs in ability to complete a task [Lin et al. 2009]. A creator describes
how approval of his first project convinced him to start a second:
“I don’t think I would have been as empowered to go out and do [my second project] so much if I hadn’t
had the success with the first project. . . . It’s all about forging relationships with people and encouraging
them.”
Approval for an idea can also be considered as positive feedback on one’s project. A
creator describes how he uses funding success to minimize risk long term and determine
that his work is worthwhile to pursue:
“I have no idea if people will want [my product]. So like if people don’t want to buy it, and they don’t like
it . . . there won’t be any. Then I won’t have made them. . . . It’s just an incredible way to take a risk and
it’s a totally safe risk to take.”
Creators are motivated to participate in crowdfunding to gain approval for themselves and their work. The approval can come in the form of monetary backing, evangelism, and feedback. Unlike in other online communities, monetary backing strengthens
validation. Crowdfunding platforms provide a unique opportunity to satisfy multiple
motivations that traditional funding mechanisms, such as grants and venture capital
funding, and online social communities do not necessarily satisfy.
6.1.5. Creator Motivation: Maintain Control. Furthermore, we find that creators are motivated to participate in crowdfunding to maintain control over their work rather than
forfeiting control to the investor. Unlike many traditional fundraising methods, funding is not contingent upon a select group of people’s preferences, such as those of an
angel investor or venture capitalist. For example, a video game designer explained:
“In game development, the problem is, publishers like Electronic Arts or anyone else invest in developing
studios, so they get to say what they do, and they also get creative control over a lot of stuff because of the
contracts they sign. And this way [through crowdfunding], it’s the gamer that decides which projects they
want to do, what they want the developer to do, and that’s a big deal for us because we never had a say
in any of it before. It’s usually the guys with the billions of dollars that make all the decisions for us.”
Before crowdfunding, creators often had to trade project control for funding and other
benefits associated with working under a large label. Now that crowdfunding provides
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an alternative way to raise funds, creators have more freedom in deciding which
development route to take. However, autonomy may come at a cost. One nonfiction
project creator described the tradeoffs he made to maintain control of his work:
“Creative control [and] editorial control. . . . You gain those in self-publishing, but you’re trading marketing, an entrenched network of contacts, trustworthiness from being associated with an established
label. . . . I prefer the tradeoffs that I’ve taken for what I’m giving away.”
Our findings suggest that maintaining control over one’s project is often more valuable than institutional legitimacy associated with a major producer. As crowdfunding
is becoming more well known, platforms themselves often provide institutional legitimacy that manufacturers once did.
Maintaining control gives people confidence in their ability to accomplish a task
on their own, thus building self-efficacy [Bandura 1997]. A creator of a food project
described the exhilaration of working on her own terms:
“It was this whole fearless approach. . . . It just kind of made me feel like, I can do anything, and I should
do anything. Like, no one should be held back by you know, whatever. That was the first lesson for me,
was just going for what I wanted with the support of the community with me.”
Creators are motivated to participate to maintain control—making choices about the
direction of the work. Autonomy supports feelings of competence and allows creators
to execute their project true to their vision.
6.1.6. Creator Motivation: Learn New Fundraising Skills. Having control over a crowdfunding
campaign forces creators to gain experience in areas outside their professional expertise. Although creators did not initially report being motivated to learn, those who
had completed campaigns, both successes and failures, were motivated to participate
again to improve skills to fundraise effectively, such as marketing, communication,
management, risk taking, and financial planning. As one creator noted:
“I went to art school. I went to graduate school. We didn’t have one single class on fundraising. We didn’t
have anything on business at all. And I just think if you’re going to make it as an artist, . . . it’s also
about being persistent and strategic. [Crowdfunding] is a really do-able way to really practice and hone
[entrepreneurial] skills.”
In addition to getting hands-on business experience, crowdfunding also offers a key
source of feedback that helps everyday people learn about the novelty and usefulness
of their ideas in addition to providing a platform for implementation. Posting a project
on a crowdfunding platform requires creators to address a general audience. A creator
of a research project explains how posting on a crowdfunding platform required her to
learn how to frame her work for different audiences:
“I really think [crowdfunding] helped me communicate with the public and get them interested in my
work.”
To communicate this work, creators learn new forms of communication in which
they did not have prior experience, such as videography, photography, and writing for
the general public. A creator reported enjoying learning how to make a video for her
crowdfunding page:
“I’ve never made a video before for my research. . . . It was really a lot of fun, so I really enjoyed that. That
was not something I had ever done before.”
Creators also learn what kind of language to use in their pitch. One informant noted:
“I learned all of those tips about, you know, keeping things very progressive sounding, and keeping the
vocabulary very positive versus desperate.”
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Informants reported the usefulness of learning new ways of communicating in order
to reach a larger audience. Each of these creators described how they plan to utilize
these learned business and communication skills and strategies in the future if they
start another campaign.
Overall, creators are motivated to participate in crowdfunding to raise funds, expand
awareness of their work, form connections with others, gain approval for their work and
themselves, maintain project control, and learn new skills. Crowdfunding platforms
provide a unique opportunity to satisfy multiple motivations that traditional funding
mechanisms do not necessarily satisfy. The next section reports findings of the research
on supporters, those who provide resources to the creators.
6.2. Motivations to Become a Supporter
6.2.1. Supporter Motivation: Collect Rewards. One motivation of supporters in crowdfunding communities is the desire to collect external rewards such as an acknowledgment,
a tangible artifact, or an experience. An acknowledgment may come in the form of a
telephone call, while a tangible artifact may be a CD or gadget. An experience may
involve, for instance, meeting with the creator. The creator’s goal is to provide rewards
that satisfy the supporters’ desire to collect. A person who funded an iPad accessory
describes his anticipation to use his future reward (the accessory):
“I like to buy things that I can play with.”
Many supporters refer to the transaction as “buying” and “getting,” suggesting that
crowdfunding shares some elements with the consumer experience. However, unlike
most transactions in the formal economy, supporters give money and then wait for
several weeks or months before receiving their reward. Waiting is a common practice
in the informal economy, which, unlike the formal economy, is not taxed or monitored
by government. For example, a person may pay his or her friend to create a custom
bike frame in the friend’s garage and wait months before receiving the finished product.
The supporter puts forth funds prior to product creation, trusting that the creator will
deliver on his or her promise.
Even though supporters may delay gratification, they are motivated to increase their
funding amount to get a desired reward. This suggests that supporters are aware of the
value of the product, service, or experience that they will receive in exchange for their
financial support. A supporter who contributed funds to a documentary film project
commented:
“I’m not going to give them 5 dollars, I’m going to give them 10 dollars because 5 more dollars will give
me a high definition download of this film. That’s worth it.”
Supporters exhibit consumer behavior, expressing interest in receiving a reward in
exchange for giving money. However, the fact that they are willing to pay prior to
reward creation and wait weeks or months sets this type of transaction apart from
traditional consumer transactions.
6.2.2. Supporter Motivation: Help Others. While many supporters are motivated to collect,
others are motivated to “give.” This behavior resembles philanthropic behavior. Supporters express a strong desire to help creators with whom they have a personal or
extended connection. One supporter explained:
“I’ve funded projects where I have a personal connection to the person making the appeal.”
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When posting projects on crowdfunding platforms, creators learned about supporters
who had wanted to support them but previously weren’t able to do so. An oceanographer
noted:
“It turns out that there were a lot of friends and family that wanted to support what I was doing and
didn’t have an avenue to do so. [Crowdfunding] provided an avenue.”
Yet, the connection to the creator is not always personal. In one example, the keyboardist of the British band Marillion explained to his fans that the band could not
embark on a US tour for lack of funds. In response, the fans created a crowdfunding campaign and raised more than $60,000 to fund the tour [Spellman 2013]. Fans
contributed time, effort, and money to help the creators.
Our data also suggests that supporters can be willing to prioritize others at their own
expense to help a friend in need. A supporter described how she decided to monetarily
support her friends even though she had limited financial resources:
“After having lost my job in May, I haven’t had any extra money whatsoever. I hardly have five dollars to
my name. . . . But, for the most part, if a friend is in need I’ll try to help him out as best as I can.”
Supporters are also willing to support people they do not know well. A young professional who supported a journalism project stated:
“It’s [my friend’s] brother, I’ll just give him some money. Like, that will be nice. . . . I think they were pretty
close to their goal, but they hadn’t quite reached it at that point.”
Supporters report the desire to help creators who are close to their funding goal in
hopes that they make a meaningful impact. And they can track the creator’s progress
on the project page. A supporter describes his desire to help a friend who wanted to
sell his music album:
“[His project] was something like $500 short at the time, and I told him, if it doesn’t go over the number
the day before, I will put the rest of the money in. . . . I’d seen him work so hard on this material. It was
really important to me to make sure that the project got funded.”
If a supporter has a personal connection to a creator, he or she is also more likely
to be aware of the amount of work the creator has put into the project. Crowdfunding
provides supporters with a way to support creators with unique ideas. One supporter
of community design projects reported:
“I like supporting creative people that I feel have authentically good ideas and maybe wouldn’t get
mainstream support from the public. So, they might be doing something unusual . . . but you can see that
there is something valuable there.”
When projects are successfully funded, the success is shared between creator and
supporter. Supporters are motivated to help others with whom they are strongly and
weakly tied. These ties could be from friendship and/or shared interests.
6.2.3. Supporter Motivation: Be Part of a Community. In addition to supporting individual
creators, crowdfunding also provides a way to feel part of a community of like-minded
people. One serial technology supporter stated:
“There’s definitely a sense of community . . . some sort of responsibility [to support].”
Supporters express the desire to see evidence of being part of a select group. Crowdfunding platforms achieve this by listing who has supported a project on the project
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supporter page. A supporter of a design project described how she liked seeing a photo
of herself on this page:
“I was like, oh that’s cool that my picture will be on the [supporter page]. So, that’s neat. I’m part of this
community that’s supporting [this project].”
This page allows supporters to easily see who supported the same project. Being part
the project-supporter community also allows supporters to have a say in the design of
the final product. One supporter of a video game project described his interaction with
other supporters in the design process:
“[I follow the campaign] fairly closely. I check the [project website] once or twice a day in the forums and
I interact with the community online . . . mostly the backers. . . . [We] decide which direction we feel the
game should go.”
This aspect of collaborative design is a unique characteristic of the crowdfunding
community. Supporters also report being motivated to support people they trust. One
supporter described how this aspect of trust made him feel more comfortable with
giving money to unknown others:
“I think that all or almost all [projects] were done by people that I don’t know. . . . There’s something about
the nature of [the crowdfunding] community, I’m a little more willing to trust.”
Trust is a common basis for monetary transactions [Gefen 2000], and crowdfunding
platforms are able to foster trust between supporters and creators and other supporters.
Overall, supporters are motivated to participate in crowdfunding because it provides
a visual form of acceptance and gives them a unique opportunity to interact with and
contribute to a like-minded group of people.
6.2.4. Supporter Motivation: Support a Cause. In addition to supporting creators, crowdfunding supporters are motivated to support causes analogous with their personal
beliefs. When asked what types of projects she funds, a supporter replied:
“Design to create social impact. . . . My goal is to be as supportive of these initiatives as possible. . . . From
an identity standpoint, that’s something that I would want to be associated with.”
Identity influences what actions people take and why they give. People support efforts
that are consistent with their identity or the identity to which they aspire [Aaker and
Akutsu 2009]. Some supporters even decide to forgo the reward and have 100% of their
funds go directly to the project cause. A supporter who contributed funds to a weather
prediction application described his frustration with creators who spend money on
rewards that are not directly inline with the success of the project:
“Don’t spend that money on making t-shirts, spend it on building software. . . . I want to see that my money
is being used well.”
Supporters prioritize motives differently. Although some people are motivated to
collect a reward, others are primarily motivated to support a cause. Some creators
consider allowing the creator to maintain project control as one worthwhile reason to
participate in crowdfunding. One technology supporter reported:
“I really like the idea of people being able to get off the ground without needing to buy into a big giant
corporate structure. And I like the way that people put the ideas they want out instead of having to
compromise those ideas in order to get their product out.”
Supporters are motivated to support nontraditional means of production that allow creators to maintain creative control. A supporter of design projects noted the
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differences in community behavior between those who participate in crowdfunding
and those who use more traditional fundraising methods:
“In other domains . . . people could have a tendency to feel competitive with people who are doing something
similar. But, what I think what’s unique about this space [crowdfunding], is people feel more collaborative.
So, I feel more like funding these types of projects as an act of good will, and say like, hey you guys are
doing great stuff. . . . I just wanted to be a part of that uplifting force.”
Cooperation remains a normative behavior for many online communities [Kraut and
Resnick 2011]. While supporters of both causes and creators are primarily motivated by
philanthropic behavior, they often appreciate a memento of their giving experience. A
supporter who contributed to a project that employed local women in Chile commented:
“I thought it would be nice to get something that would remind me of the project that my friend was doing
and kind of connect me to the culture and the community that I was supporting.”
Crowdfunding provides an avenue for supporters to be part of a community of likeminded individuals and express their beliefs through the exchange of resources (primarily financial), whether it is for the creator or project cause.
6.3. Deterrents to Become a Creator
In addition to describing their motivations for participating in crowdfunding, informants also indicated several factors that significantly reduce their likelihood to solicit
resources and contribute. To understand the deterrents to becoming a creator, we interviewed people who participated despite concerns about crowdfunding and people
who considered crowdfunding but decided to use an alternative funding method for
their projects. For creators, these factors included hesitance to publicly solicit funding,
concerns about the time commitment relative to other funding mechanisms, fear of
failure, and concerns about privacy and plagiarism. Supporters were mainly concerned
about waiting for and not receiving rewards and ineffective use of funds. We briefly
discuss findings for creators and supporters.
6.3.1. Creator Deterrent: Inability to Attract Supporters. Many creators chose not to crowdfund because they believed that existing crowdfunding platforms did not currently or
would not attract a sufficient number of supporters to fund their project once launched.
One creator of a web networking application who initially considered Kickstarter but
ultimately chose to pursue another source of funding described his concern:
“[Crowdfunded projects] have to appeal to a large group of people. . . . It has to resonate with large
crowds. . . . We didn’t think [our project] would resonate with a large group of people, specifically the kind
of people that are on Kickstarter.”
Instead, this creator sought $60,000 dollars in funding from an angel investor in
a major metropolitan area. Another creator developing a medical device designed
for nurses and doctors examined past crowdfunding successes and decided against
participation:
“We looked at who has been successful on Kickstarter, and all the ones that have been successful in the past
are like consumer products . . . you know, video game consoles or iPhone accessories and things that the
mass market and consumer market are looking for. . . . We didn’t feel like [our project] would have gotten
enough appeal to have gotten the amount of money we were looking for. . . . There’s a certain type of product
that does well on Kickstarter and there’s certain types of products that don’t do well. And we didn’t think
ours would do well. Nurses would probably get [our product], because that’s who it’s really designed for,
and then maybe mothers and germaphobes. . . . We didn’t see those people visiting Kickstarter.”
Because publicizing one’s project can take up to 11 hours a day, one creator who
needed funds to manufacture a toy for diabetic children described how she felt her
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efforts were best used at targeting her specific audience members face to face at outreach events rather than online through an unfamiliar platform:
“It just was just not the right audience sort of thing. . . . I think [our market] is a little bit challenging
because it is a small population that you need more of the direct approach to make families buy [our
product].”
This creator decided to attend a conference for parents who have diabetic children.
There, the parents were able to pick up and test the product in real time with their
children before putting in an order. Much of these beliefs stem from the idea that crowdfunding supporters are more interested in supporting the product and the process. For
example, creators believe that supporters will only be interested in supporting their
project if they get a reward at the end. Supporting startup processes, such as paying for
office space and prototyping materials, seems less appealing. One creator of a mobile
app project explained how it is difficult to keep up supporter interest once the project
is over:
“I think [crowdfunding] is really good for a one-off product or like, a product that you aren’t necessarily
thinking about expanding into a line, but if you do want to create that brand equity, it’s very difficult to
do that out of a crowdfunding campaign.”
Another creator of a product design project, who chose angel investing over crowdfunding, explained that she did not want to “debut” her product in a crowdfunding
campaign when the final product was not yet finished. Like the previous creator, she
saw launching a crowdfunding campaign as more of a final public presentation than
an intermediate funding step:
“We didn’t want to put an expectation to launch this initial idea when our product is evolving all the
time.”
This creator decided to pursue angel investing instead as she felt that angel investors
were more likely to fund the process rather than the final product. Believing that only
projects with good rewards do well, many creators choose not to crowdfund because
they do not have compelling rewards to give to supporters. One creator of a mobile
application explained his dilemma:
“In order to get the word out, you have to have good rewards. . . . People give money because they want
to preorder these products. . . . So for the particular products that I’ve worked on, there isn’t really much
value . . . for the people to preorder the product because the product is more intangible.”
Another creator who wanted to make a note-sharing application for college students
explained his concerns for not being able to entice supporters through incentives.
“At the stage that we are at, it would be hard to you know come up with a set of incentives that would be
compelling enough to have a really blowout successful crowdfunding campaign.”
Instead, this creator chose to pursue funding from a start-up competition in a major metropolitan area
where providing rewards was not required.
Many creators were deterred from crowdfunding if they felt they were unable to attract their target audience or develop adequate rewards—features that crowdfunding
platforms emphasize as keys to success. Together these findings reinforce the perception of crowdfunding as online platforms for consumer purchases.
6.3.2. Creator Deterrent: Fear of Public Failure and Exposure. Creators also choose not to
crowdfund because they fear public failure and exposure. Potential creators were concerned about ruining chances of future investing, personal embarrassment, and others
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stealing their ideas. A toy designer explained how other investors, such as angel investors and venture capitalists, may be less likely to fund if the creator had failed in
crowdfunding.
“If we did [crowdfund] and we weren’t successful . . . we felt like we’d be shooting ourselves in the foot for
getting money from other sources. So, the other venture funds and angels [would] look at us and then if
we couldn’t pass that crowdfunding test, they might be more reluctant to invest.”
A technologist expressed a similar concern, describing his perception of crowdfunding
success as more indicative of good marketing skills rather than a good product.
“When [crowdfunding] doesn’t work, which is more often than not, the reasons can just be attributed to
‘your product sucks . . . and it will never be successful’ whereas your product might be just fine and you
just didn’t do the campaign right.”
Another creator who is creating a tech startup described the crowdfunding failure
as “bad data” that could haunt her funding endeavors in the future.
“If you don’t do well [in crowdfunding], the data is public and doesn’t go away, so that when you are
trying to fundraise, people will be like, you just failed a Kickstarter campaign, why are people going to
use it. And it’s really hard to back that because it’s pretty harsh data to know whether your product is
going to work or not.”
In addition to worrying about what future investors might think, creators are also
worried about the impressions from their friends and family. One creator described
how she did not want her failure to be on public display.
“I think a lot of the fear comes from the fact that if you don’t meet your goal, you don’t get any money. . . .
The risk is if you publicize to all your friends, all your family, all your colleagues, everyone will know if
you fail.”
In order to avoid public failure, one creator privately sold his car and put the funds
toward his campaign to help him reach his goal. While this case may be extreme,
creators report anxiety about having overestimated the size and commitment of their
supporter community. Supporters indicate that they vicariously experience the success
and failure of the campaigns they fund, suggesting that the fear of failing to meet a
goal is shared among creators and supporters.
Whether they ultimately launched campaigns on crowdfunding platforms or not,
most creators were hesitant to ask their social network for money. One creator of a
publishing project described how crowdfunding felt like begging.
“When I get into this whole scheme that the work is also trying to float on money from my friends . . . it’s
all kind of dirty.”
While the rise of crowdfunding has normalized the idea of asking for small donations
from one’s social network, most creators still report discomfort with asking for funds.
Potential creators report feeling even more guilty about asking for money from friends
who earn less money in their day job than they do. One supporter explained why his
job status prevents him from wanting to become a creator:
“It looks kind of weird for me with a full time engineering job to be asking some of my friends for money
who are less financially secure.”
Crowdfunding exposes not only financial vulnerabilities but also ideas. Creators
report being deterred by the possibility of idea theft. One creator of a mobile travel
application explained his worries about sharing his ideas:
“In some cases, your intellectual property, which is a big part of your business, is a trade secret. And if
you put stuff out . . . people can steal your idea. And in many cases its more of a, who can execute the idea
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quicker or first, and they do it and make the money and then move on. . . . You may not be ready to move
so quickly.”
Some creators try to protect against idea theft by getting a patent prior to their
campaign. However, getting a patent is not an easy process, and applying for it and
defending it may not be worth the effort in order to crowdfund. One creator of a bike
product explained:
“Just because you’ve filed a provisional patent on something doesn’t mean someone can’t take that idea
and run with it.”
Crowdfunding requires massive public exposure, and for many potential creators,
such exposure at an early stage of their work threatens chances of future investing,
reputation in one’s social network, and idea theft.
6.3.3. Creator Deterrent: Time and Resource Commitment. While crowdfunding may be seen
as more efficient for certain creators, such as musicians or novelists, with experience
managing a large number of supporters, it can seem overwhelming to others with
limited experience. Because crowdfunding can involve answering to hundreds and
thousands of supporters, creators report being deterred by the amount of work it would
take to deal with such a large audience. One student creator of a research project, who
had previously tried crowdfunding, described how she chose to apply for grants rather
than crowdfund again because the grant application process took less time.
“So, the grant process seems to be just like shorter and quicker. It’s easier to do when you’re just at a
university, and there’s a ton of grants at your disposal. You can just apply and people are very receptive
when your project is academic. . . . So, that seems to be easier than a crowdfunding campaign that lasts
like, a month, or several months, and involves a lot of planning and a lot of work throughout the process.”
Another creator, who is a PhD student, further compared the benefits and disadvantages of crowdfunding to the experience of writing research grants:
“[For] typical science grants, you put a lot of work into them up front. [For crowdfunding], I felt like, it
was much more time . . . [c]onstantly advertising, networking, encouraging people to go on and donate,
and then responding to a lot of the replies that I was getting. It ate up a lot of time. And then after all
that fun was over, you have all these different gifts that you promised people. . . . In some ways, bang for
the buck financially, it was not as lucrative as getting a grant.”
Creators report spending between 30 minutes and 11 hours a day on their live
campaign, which is a highly varying time commitment. Although some crowdfunding
campaigns may be less time consuming than some traditional funding methods, such
as hosting a fundraising event, it may be more time consuming than others, such as
writing a grant. Despite the time commitment of running a campaign, creators report
receiving the actual funds more quickly through crowdfunding platforms than with
grant funding.
Creators also explain the effort required to manage many supporters. One creator
of a travel product, who chose a startup competition to raise funds over crowdfunding,
explained how the crowd wants to always see progress, which can be overwhelming for
a project creator. One creator of a mobile app project explained:
“So you want to delight your customers, your supporters, and if you’re not ready to go out there, you can
fizzle. People love to see progress and rapid progress, and you’ve got to maintain some momentum.”
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Another entrepreneur described how communicating with many supporters can take
up valuable time, especially when he was busy attending to the other needs of launching
a startup.
“I mean you are busy enough as an entrepreneur. To spend, you know half your day fielding questions or
calls from investors to see if you’re gonna get your product out. . . . Having a lot of investors could be a
real challenge.”
Another creator who had previously unsuccessfully tried crowdfunding described
how he chose not to crowdfund again because he did not want to manage an audience
that was larger than what he and his team could handle:
“We didn’t really have the capability to scale that quickly. . . . So we chose not to do [crowdfunding], just
cause we felt it would have been a big burden on us if we had reached a larger market than we already
had.”
In addition to time commitment, crowdfunding can also require an initial financial
commitment. One creator of a web application who chose a funding competition over
crowdfunding described how he did not have the funds to produce a well-made publicity
video:
“I’ve watched a lot of videos that have been posted on sites like Kickstarter. . . . I noticed that projects . . .
that had really good videos, they did a lot better than those that didn’t. . . . The time and financial resources
required to put into a video of production value is a little bit beyond our means at the moment.”
Knowing how much time and work go into crowdfunding, another creator of a theater
project described how she needed a bigger team to run an effective campaign:
“The starting point should be trying to pull your team together, because you are in so much better of a
position when it comes to fundraising”
Some novice creators who have access to university funds and student-focused competitions have described how these alternative funding sources are more straightforward
and provide more mentorship than crowdfunding. One creator of an online application,
who chose to do a funding competition instead of crowdfunding, described how funding
competitions are better options for people who are novice project creators:
“There’s mentors that are assigned throughout the competition. People are dedicated to kind of check in
on you and see how you’re doing, whether or not you have questions. . . . I think with crowdfunding, I set
my own deadline, I set my own goals, and so I guess it’s targeting different audiences. I think if you’re just
starting, the prior (competitions) would be really good. If you’re like a distinguished artist, or you already
know what you want, then crowdfunding would be a good way to go about it. . . . With crowdfunding, it’s
a little more ambiguous in terms of what your responsibilities are.”
As this creator described, crowdfunding platforms provide little personal mentorship
during the crowdfunding campaign. Often platforms only provide a question-answering
service, which may take weeks if not longer for them to respond. By that time, the
creator’s campaign may be over.
Another creator explained that a lack of guidance after the end of the campaign is
even more of a deterrent. Once the campaign ends, crowdfunding platforms provide
little opportunity to continue publicizing your project.
“Once you get all your preorders through crowdfunding, you’ve used up your entire base of people who
would be willing to buy your product at the level of fidelity that it’s at. So either you need to jump to a
higher level of fidelity or somehow you need to recruit a whole new batch of people who are interested in
your product, which is very difficult to do because you’ve just sort of done this national opening for your
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product. There are a lot of traps involved for crowdfunding that I don’t think a lot of people see, because
it’s not something that people are aware of - that people have made an effort to inform the public about.”
Crowdfunding is described as a public “debut” or “national opening.” Consequently,
creators want to present their best work and many are deterred from participating
if they feel they need more time, resources, and institutional support than what is
currently provided by the crowdfunding platforms.
6.4. Deterrents to Becoming a Supporter
6.4.1. Supporter Deterrents: Distrust of Creators’ Use of Funds. Some crowdfunding platforms allow creators to keep what they raise even if they do not reach the funding goal.
Even though this is beneficial for the creator, some supporters worry that their money
will not be used effectively. One supporter of a community design project described how
she prefers the all-or-nothing funding model to others:
“There’s kind of a sense of security knowing that . . . I’ll only be paying if she meets her goal.”
The all-or-nothing funding model may be one of the reasons that Kickstarter has
enjoyed more success than other crowdfunding platforms that use the all-and-more
model.
Another potential supporter reported her concern about creators’ inability to use the
funds wisely based on an online article she read.
“I read an article recently about Kickstarter and how too much funding has become like a problem because
they get money and they don’t necessarily have the assets to use it. So I think that can be an issue as well.”
Because many creators on crowdfunding platforms have limited business experience,
they often underestimate the amount of planning and time it takes to finish a project
and deliver on rewards. One supporter of technology projects noted:
“Part of the process that’s bad about [crowdfunding] is that it’s new people, and they really don’t have
any idea how long a product is going to take [to make]. So, they often underestimate the amount of time
it takes to get something out.”
A creator of an education project validated this supporter’s complaint when he described how he failed to deliver his rewards due to time constraints:
“The time spent to do [shipping] was . . . like a huge, I don’t know, wake up call. So, at that point, what we
did was we reached out to all our donors and asked them personally, would you mind if we didn’t send
you a prize?”
Since receiving a reward is considered a main motivation for supporters, not receiving
the reward can act as a deterrent for future funding activity. Unlike many peer-to-peer
marketplaces such as eBay, crowdfunding platforms currently do not have “resolution
centers” if a conflict arises.
6.4.2. Summary of Findings. While many creators and supporters are motivated to participate in crowdfunding, many indicate factors that demotivate. For creators, crowdfunding can be both an efficient and an inefficient way to solicit resources; it can be a
way to raise awareness, but at times at the annoyance of supporters; and it can lead to
public success or failure. For supporters, crowdfunding can be a way to support causes
and creators with limited access to traditional funding mechanisms. The downside
is that supporters must potentially accept delays, ineffective use of funds, and poor
communication.
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7. DISCUSSION
With our research we sought to shed light on a critical question regarding a new online social phenomenon [Kraut and Resnick 2011]: Why are people motivated to
participate or deterred from participating in online platforms? We offer the
first in-depth qualitative investigation of crowdfunding communities across several
crowd platforms. By interviewing creators, supporters, and those who considered engagement, we present nuanced qualitative evidence that extends previous exploratory
research on crowdfunding and reveals new findings that fundamentally influence how
we think about motivations and deterrents to participation in crowdfunding.
We validate previous findings [Lambert and Schwienbacher 2010; Schwienbacher
and Larralde 2010] that creators are motivated to participate in crowdfunding to raise
funds, expand awareness of work, connect with others, and gain approval. Our qualitative research substantially refines our understanding of what motivates creators to
participate in crowdfunding, including the prospective benefits of long-term interaction
with supporters and the informational and financial feedback they need to build confidence in the uncertain environment of creative work [Gerber 2011]. We discover two
additional creator motivations—the desire to maintain control and learn—that have
received less attention to date.
Our research also confirms prior work suggesting that supporters are motivated to
participate in crowdfunding to expand their social networks—supporters who provide
monetary, informational, and social support to creators can feel they are a part of a
special community, an outcome that satisfies deep human needs for belonging. We also
explore additional supporter motivations, such as the desire to support causes, support
people, collect rewards, and be recognized.
Crowdfunding platforms depend on the active and engaged participation of both creators and supporters. It is therefore critical to understand both creator and supporter
motivations and deterrents. Our article makes significant strides toward a more complete understanding of the key motivational ingredients affecting the vibrancy and
success of crowdfunding communities.
Furthermore, while crowdfunding is frequently defined as the request for financial
resources on- and offline in exchange for a reward offered by the creator [Belleflamme
et al. 2011], our research suggests that the title “crowdfunding” and its definition are
too focused on the exchange of funds. While resource exchange is indeed crucial to
crowdfunding, our research demonstrates that crowdfunding involves the exchange of
a broader variety of resources that are exchanged both on- and offline [Greenberg et al.].
The exchange of money alone cannot fully explain participation. We present evidence
strongly suggesting that participants exchange resources with the goal of wanting to
learn from and connect with others.
We argue that the rapid rise of particular crowdfunding platforms may be attributed
in part to the way these platforms satisfy people’s social and cognitive needs rather
than in their desire for financial resources alone. Both creators and supporters describe being strongly motivated to learn how to carry out the project themselves, on
their own terms. Traditional sources of financial capital, which might otherwise be used
to procure necessary physical and human resources, also come with constraints. While
traditional financial institutions intend their investment and lending constraints to
reduce risk and increase the chance of project success, many creators prefer the relative autonomy of crowdfunding financing: maintaining control lets creators determine
project direction. In addition, our interviews confirm that creators’ experience of autonomy further amplifies their motivation to learn [Deci et al. 1981].
For supporters, too, autonomy matters, though in the supporters’ case, it is the freedom to choose among creators’ projects that is the source of some of the motivation to
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support crowdfunding. Opportunities for choice and self-direction are found to enhance
intrinsic motivation, learning, and greater feelings of autonomy [Deci and Ryan 1985].
In this regard, then, crowdfunding supporters resemble consumers in the traditional
marketplace [Iyengar and Lepper 2000]: they are motivated in part by perceptions of
control and choice. However, crowdfunding supporters also share similarities with participants in online peer production [Resnick and Kraut 2011; Kraut and Resnick 2011],
as they frequently seek to maximize benefit for the community members rather than
formal institutions. The awareness of community that both supporters and creators
share is crucial and distinctive.
Our study finds that creators and supporters engage in crowdfunding to connect
with others. Creators seek both to expand awareness of their work and to make connections that benefit them professionally and socially: crowdfunding communities provide a receptive network for creators’ aims. Supporters find that supporting causes and
helping others through crowdfunding gives a powerful sense of community, satisfying a
powerful human need for social affiliation. Supporting a cause financially can be a clear
way to signal affiliation with a certain group of people. Marketing scholars find that
people sometimes spend money strategically in the service of affiliation [Mead et al.
2011]. Helping others allows supporters to make stronger interpersonal connections
through altruistic behavior. Furthermore, participating on crowdfunding platforms
further allows supporters to identify with a group of people with similar interests. In
our study, both creators and supporters reported feeling a powerful and unspoken tie
with other creators and supporters, which enhanced their desire to connect and their
sense of mutual obligation. Overall, addressing these desires satisfies basic psychological needs for social contact [Reiss 2004]. Like online peer production communities
[Kraut and Resnick 2011], creators and supporters seek a trusting community of likeminded others. They are motivated to learn from each other, receive feedback, and
expand awareness of their work in a social setting.
7.1. Crowdfunding as a Type of Crowdsourcing
This work contributes to our larger research agenda to examine the role of crowdsourcing in innovation. Such a perspective is critical given the growing research on
online crowd behavior, which will likely change the workflow of creative and routine
work [Dontcheva et al. 2011]. Online crowds can influence how distributed groups of
people can collaborate to get work done on a scale that exceeds individual capabilities.
Platforms that satisfy motivational needs may ultimately encourage a more diverse
group of people to launch their ideas compared to platforms that do not satisfy these
motivational needs. New models of sorting and prioritizing opportunities for supporters may help to direct individuals with particular motivations [Mintzberg 1979]. We
suspect that platforms are already being designed to enhance motivation, which has
been found to be malleable and context dependent [Ryan and Deci 2000].
8. DESIGN PRINCIPLES FOR CROWDFUNDING
Practically, our investigation offers insight into how to effectively recruit and retain
creators and supporters in crowdfunding activity. Based on research and related literature, we offer preliminary design principles for crowdfunding.
These three design principles are specifically intended to motivate potential creators
and supporters to individually begin and sustain their involvement in crowdfunding.
Table II summarizes the design principles. For each principle, we briefly present the
underlying motivational mechanism and ground these principles in examples from
existing crowdfunding platforms and online communities.
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Table II. Design Principles for Motivating Participation in Crowdfunding
Design Principle
1
Support resource exchange
2
Support community before,
during, and after
3
Provide transparency
Motivation
Raise Funds (Creators)
Gain Approval (Creators)
Learn New Skills (Creators)
Collect Rewards (Supporters)
Support Causes (Supporters)
Help Others (Supporters)
Form Connections (Creators)
Gain Approval (Creators)
Learn New Skills (Creators)
Expand Awareness (Creators)
Be Part of a Community (Supporters)
Maintain Control (Creators)
Example
Open forums to post and
seek production needs
Platform to support creator
and supporter meet-ups
Presentation of risks in an
easy-to-understand and
nonthreatening format
Fig. 3. Currently, Kickstarter only formally supports the financial exchange of resources online despite
interest by creators and supporters to share human and informational resources before, during, and after
the campaign.
8.1. Support Resource Exchange
Creators, supporters, and platforms should be able to exchange human, information,
and financial resources before, during, and after the crowdfunding campaign. Currently, much of these exchanges are informal. While the platform is built around the
safe and easy exchange of financial resources between creators and supporters (see
Figure 3), the exchange of human and information resources could potentially enhance
a project’s success. Volunteer Match is an example of an online site that supports
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Fig. 4. VolunteerMatch supports the exchange of human resources for organizations when and where they
need help.
the exchange of human resources for organizations and individuals in need (see Figure 4). Further, resources should be available at any time throughout the crowdfunding
process—not just during a live campaign.
The human resources should be available to fulfill tasks associated with creative
production, such as creation, manufacturing, implementation, marketing, planning,
and fulfilling. Information resources should be available to transfer knowledge and
advance explanations. Access to informational and human resources has been found to
have a direct positive impact on persistence in ambiguous tasks [Cohen and Levinthal,
1990; Tushman and Nelson 1990]. A person’s perception of adequate resources may
affect his or her belief about the intrinsic value of the projects he or she has undertaken
[Amabile et al. 1996]. Similarly, researchers of creativity support tools advocate for
including multiple avenues for gathering new resources [Schneiderman 2002].
Example: Open forums to post and seek production needs.
8.2. Support Community Before, During, and After
Crowdfunding platforms could support opportunities to share their work prior to, during, and after the crowdfunding campaign. Prior to the campaign, there should be
opportunities to meet up with potential supporters to increase awareness of the upcoming project. Throughout the project, there should be a variety of easily accessible
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Fig. 5. Online creator/supporter discussion on Kickstarter during the SnowXu project campaign.
Fig. 6. Crowdfunders in Austin, TX, have formed a group via “Meetup” to support each other’s efforts.
channels to raise awareness online and offline. Following the campaign, additional
resources are often needed to keep supporters up-to-date on subsequent progress (see
Figure 5). Informal meet-ups are occurring in cities such as Austin, TX (see Figure 6),
while creators have turned to other social media forums, such as Reddit, to continue
conversations about a project after the campaign.
People are more likely to persist when they publically commit beforehand and then
share small wins with others throughout the effort [Weick 1984]. Through the sharing process, they receive positive validation and are more likely to believe they can
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accomplish a task, are willing to take on more challenging work, have greater intrinsic motivation to complete a task, persist in the face of challenges, and expend more
effort in the task [Bandura 1997; Deci and Ryan 1985; Schunk 1985]. Prior HCI research recommends that online communities encourage new members to observe and
learn, and experts to share and grow, allowing everyone to contribute when and how
they feel most comfortable [Jenkins 2009]. Peer production communities encourage
recruiting and clustering similar others to increase identity-based commitment over
time and coordinating contributions to maximize benefits for the community [Resnick
and Kraut 2011]. Community can provide encouragement, feedback, and inspiration
[Amabile et al. 1996; Parnes and Noller 1972]. While consistent with HCI research,
this principle emphasizes ongoing community creation.
Example: Platform to support creator and supporter meet-ups.
8.3. Provide Transparency
Crowdfunding supports new behaviors. We must be concerned with how creators and
supporters understand the implications of their new behaviors on crowdfunding platforms. Copyright, or permission granted to the creator of an original work, is a particular area for concern. Creators upload unique content when pitching their work. We
suggest including the legalities in the sign-up process in a way that is enjoyable and
nonthreatening for the creator and supporter. Further, platforms may collect detailed
data on supporters’ personal preferences and funding amounts. Like the copyright
issue, this issue is not always apparent to the supporter, and educating supporters
about this process is needed. We suspect expectations for transparency will increase
as crowdfunding continues to gain popularity. Companies may change policies due to
creator and supporter demand. This principle stems from the research in psychology
and HCI, which suggests that transparency creates trust, and trust supports future
participation [Gefen 2000].
Example: Presentation of risks to participation in an easy-to-understand, nonthreatening format.
These principles are a call to human computer interaction designers to rethink these
existing approaches to crowdfunding platforms with an eye toward motivating participation and overcoming deterrents. While we offer these broad principles, we also
encourage testing and evaluation in the specific context. During the 2008 Obama campaign, campaign staffers hypothesized that video requests for funds online would appeal to voters. However, Siroker and colleagues discovered through A/B testing that
people were more likely to donate to President Obama’s campaign when the campaign’s
home page showed a picture of the president with his family and a button labeled “learn
more” [Siroker 2010]. Crowdfunding platforms afford such testing.
9. LIMITATIONS
We relied on random and snowball sampling to recruit study participants. Initially, we
found it easier to recruit project creators and supporters who had reached their funded
goal, rather than those who had not reached a goal or decided not to crowdfund at
all. After developing relationships with these informants, we asked them to personally
introduce us to people who had not reached their goal or chosen not to use crowdfunding.
As word spread about our research, informants voluntarily reached out to us to talk
about their experience.
Our informants were restricted to participating in one of three crowdfunding platforms. We chose these platforms because they are the three most popular platforms for
“creative work.” However, there are additional crowdfunding platforms. It is possible
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that participants on other platforms are motivated to participate for different reasons.
It is also possible that platforms motivate participants differently [Kraut and Resnick
2011]. Further, we collected data during 2011–2013 and suspect that motivations for
participation may vary slightly as platforms are redesigned, more people are aware of
the phenomenon, and expectations for participation are altered.
10. FUTURE RESEARCH
Our initial findings suggest a number of areas for future research and design. First,
we plan to examine personal factors that may influence motivations, such as domain
and professional expertise, network [McClure 1994], and web-oriented digital literacy
[Hargittai 2005]. An accomplished musician, for example, who has experience producing albums funded by his fans may have different motivations than a novice product
designer, whose idea was initially rejected by venture capitalist funding. The actual
and perceived size of the creator’s social network and his or her online presence and
funding level may influence motivation to participate. For example, a creator who
requests $5,000 from his small social network that he perceives as large may have
different motivations than a creator who requests $100,000 and tweets regularly with
her large social network before, during, and after the campaign. Additionally, we will
examine how expertise of the creator, supporter, project type, crowdfunding experience,
management skills, social network, and online presence influence motivations in order
to design support tools that sustain engagement.
Second, we plan to investigate how the same individual can participate in three
distinct roles including observer, supporter, and creator. While individuals initiate
participation in crowdfunding in one role, early evidence suggests that they transition
between roles. For example, an individual may start as an observer, checking on a
crowdfunding website regularly to learn about new projects and gain inspiration. After
weeks of observing, she may decide to launch her project. After a successful launch, she
may see a project launched by a person who funded her and may choose to reciprocate
support. We see initial evidence supporting this hypothesis. For example, one creator
reported:
“There’s a kind of etiquette in [my film program]. If someone funded me, then I’m supposed to fund them
back. Otherwise, it would be a little awkward.”
Future work will show how individuals engage in different roles and how the extent
of participation in each role informs future choices.
Third, we will consider the individual strategies people use to engage in crowdfunding
and subsequent entrepreneurial behavior. Initial evidence suggests that creators and
supporters extensively rely on social media to spread awareness of activity and promote
engagement. As one creator noted:
“I’ve been communicating with people through Twitter, I’ve gained a bunch of new Twitter followers, a
bunch of new G+ followers. . . . I put up a website with a blog, and people can comment on the blog. . . . I
wanted to engage the public in a little more of a dialogue.”
While creators primarily want to engage with the crowd, one informant described
designing his page on Kickstarter to minimize the number of comments when he failed
to meet his deadline and felt overwhelmed by the responsibility. He described his
work as “hacking” the interface so that only a few comments could appear at a time.
With fewer comments, he felt there would be less negative emotional contagion and
ultimate dissatisfaction with his work. Creators also describe strategies for fulfilling
orders on time, such as hiring people to work for little to no money as one creator did
who hired teenagers to wrap and send packages of his books to supporters because he
had underestimated the time it would take to fulfill the orders. This future work will
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E. Gerber and J. Hui
examine how individuals choose strategies depending on personal or project-specific
goals. The design of new support tools can augment these goals and strategies based
on technical competency.
11. CONCLUSION
Crowdfunding is fundamentally changing the way people solicit resources from the
crowd to realize new ideas. The crowd contributes millions of dollars each month to
entrepreneurial creators throughout the world. Continued participation can have a
profound influence on the creative economy by influencing how, why, and which ideas
are introduced into the world [Landler 2012], [Obama 2011]. However, human computer
interaction designers have a large unrealized opportunity to design the interactions
between the creators, supporters, and the technology that connects them, to ensure
alignment of motivation among the diverse participants.
ACKNOWLEDGMENTS
We are grateful to Pei-Yi Kuo, Michael Greenberg, Lauren Tindal, and Megan Scherich for their contributions
to data collection, and to Matt Easterday, Bruce Ankenman, Rob Morris, Nick Switanek, Brent Hecht, and
the workshop participants at the 2012 Computer Supported Cooperative Work Workshop in Seattle, WA, for
their thoughtful feedback. The authors are grateful to the informants who participated in the research.
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Received May 2012; revised May 2013; accepted August 2013
ACM Transactions on Computing-Human Interaction, Vol. 20, No. 6, Article 34, Publication date: December 2013.
ELIZABETH M. GERBER and JULIE HUI, Northwestern University
Crowdfunding is changing how, why, and which ideas are brought into existence. With the increasing number of crowdfunded projects, it is important to understand what drives people to either create or fund these
projects. To shed light on this new social phenomenon, we present a grounded theory of motivation informed
by the first cross-platform qualitative study of the crowdfunding community. By performing 83 semistructured interviews, we uncover creator motivations, which include the desire to raise funds, expand awareness
of work, connect with others, gain approval, maintain control, and learn; and supporter motivations, which
include the desire to collect rewards, help others, support causes, and be part of a community. We also explore
deterrents to crowdfunding participation, including, among creators, fear of failure, and, for supporters, lack
of trust. Based on these findings, we provide three emergent design principles to inform the design of effective
crowdfunding platforms and support tools.
Categories and Subject Descriptors: H.5; K.4.3.
General Terms: Crowdfunding, Crowdsourcing, Motivation, Online Community, Design
Additional Key Words and Phrases: Creative work, innovation, psychology
ACM Reference Format:
Elizabeth M. Gerber and Julie Hui. 2013. Crowdfunding: Motivations and deterrents for participation. ACM
Trans. Comput.-Hum. Interact. 20, 6, Article 34 (December 2013), 32 pages.
DOI: http://dx.doi.org/10.1145/2530540
1. INTRODUCTION
Crowdfunding—the online request for resources from a distributed audience often in
exchange for a reward—provides a new way for individuals and teams to solicit financial
support from a distributed audience. Unlike traditional fundraising methods, such as
applying for funds from banks or foundations, crowdfunding allows creators, people
who request resources, to appeal for funds directly from supporters, people who give
resources, through online platforms [Gerber et al. 2012].
Since the first crowdfunding platform was launched in 2001 [Wharton 2010], crowdfunding has supported a wide range of project types and fundraising goals, from video
game designers who raised more than $1,000,000 from 60,000 supporters to create a
game console [Kickstarter 2012], to product designers who raised over $30,000 from
2,000 supporters to produce an eco-friendly pencil [Kickstarter 2012], to an architect
who raised $4,000 from 100 people to improve a local park [Kickstarter 2011].
Today, there are 452 platforms across the world, which together channeled
$1.47 billion in donations in 2011 [Esposti 2012]. Crowdfunding platforms charge fees
for processing donations, resulting in over $60 million in revenue for crowdfunding
Authors’ address: Elizabeth M. Gerber and Julie Hui, Northwestern University, 2133 Sheridan Drive,
Evanston, IL 60201.
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DOI: http://dx.doi.org/10.1145/2530540
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E. Gerber and J. Hui
Fig. 1. A supporter considers donating $10 to a campaign creator who had already raised $200,000 to design
and manufacture an iPhone flashlight app.
platforms. Despite the rapid growth of the online community of creators and supporters linked by crowdfunding platforms, our understanding of this new social
phenomenon is limited. To gain much-needed insight, we designed and implemented a
qualitative study to understand this emerging online community. Our research seeks
to answer the following question: What Motivates and Deters Participation in
the Crowdfunding Community?
By understanding motivations and deterrents, as human computer interaction researchers, we can identify opportunities to refine and redesign crowdfunding platforms
to improve the user experience and to better recruit and sustain participation in this
rapidly growing community [Kraut and Resnick 2011].
We organize this article into three sections. The first section introduces crowdfunding
and related research. The second section presents our findings, identifying motivations
and deterrents from both the creators’ and supporters’ perspective. The third section
offers emerging design principles to inform the design of crowdfunding platforms and
support tools.
2. CROWDFUNDING
Crowdfunding is derived from the broader concept of crowdsourcing, the outsourcing of
problem-solving tasks to a distributed network of individuals [Howe 2006]. Crowdfunding makes it possible for those with limited access to traditional sources of financial
backing, such as banks or venture capitalists, to acquire financial resources necessary
to pursue their projects. Through online transactions, crowdfunding also gives people
with disposable income a new way to give to others and “invest” in projects that might
not happen without their financial support (see Figure 1).
Popular crowdfunding platforms such as Kickstarter, IndieGoGo, and RocketHub
rely on existing web-based payment systems like Amazon Payments to facilitate the
exchange of resources between creators and supporters.1 Crowdfunding platforms provide dedicated project pages, analytics and project monitoring, and tutorials prior to
1 Online crowdfunding platforms differ in their use of terminology, referring to people who request
funds as “creators,” “creatives,” “designers,” “inventors,” or “activists” [Lambert and Schwienbacher 2010;
Landler 2012]. People who pledge funds are referred to as “backers,” “fuelers,” or “funders” [Lambert and
Schwienbacher 2010; Landler 2012]. In this article, we refer to people who request funds as “creators” and
people who provide resources as “supporters.”
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Crowdfunding: Motivations and Deterrents for Participation
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Fig. 2. Kickstarter project page for a coffee accessory including a video, written description, links to social
media, contact information, status updates on number of “backers,” dollars pledged, and time remaining in
campaign.
and throughout the campaign. Creators also rely on additional social media platforms
like Facebook and YouTube to publicize their request for funds from supporters.
To launch a crowdfunding campaign on an online platform, creators engage in five
types of work [Hui et al. 2014]. First, they prepare the campaign material. Preparation
involves creating a project profile, which typically includes a title, video, description
of planned use of funds, funding goal, campaign duration, and reward descriptions.
Creators fill out these recommended and required fields online, and if the project is approved by the platform, the platform presents their work in a preformatted page where
visitors can choose to donate (see Figure 2). Next, they test their campaign material. In
this stage, creators solicit feedback on their video and campaign description as well as
engage their audience in deciding the design direction. Third, they publicize the project
during the live campaign. Publicizing involves reaching out to potential supporters to
request support. Creators use a variety of means to reach potential supporters, including the crowdfunding platform itself, email, and online social media, as well as offline
communication technologies and in-person requests. Once the campaign is over, they
follow through with their proposed project. This stage of work involves producing and
delivering the promised rewards [Hui et al. 2014]. Rewards range from having one’s
name acknowledged in the movie credits, to getting the new crowdfunded product, to
receiving a simple “thank you” email from the creators. While some may consider these
four stages as all the stages of crowdfunding work, we also identify that many creators
also go on to contribute back to the community by providing advice and funding other
projects.
For example, two friends with an idea but no connection to capital raised $306,944 in
37 days to develop a coffee accessory on Kickstarter, a popular crowdfunding platform
[Kickstarter 2011]. In the process of crowdfunding, they explained in a video and
written description how their accessory worked, marketed the product through the
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crowdfunding platform and social media, engineered the product, and delivered the
final product to 4,818 supporters.
Online crowdfunded projects vary in scope and span across many fields, including
art, comics, dance, design, fashion, film, food, games, music, photography, publishing,
technology, theater, science, and service. Amounts raised range from a couple dollars
to over $10 million dollars. The percentage of people who reach their goal on the most
popular crowdfunding platform, Kickstarter, is 43% [Kickstarter 2011].2 Regardless of
whether the goal is met, creators maintain intellectual property.
Crowdfunding platforms employ two different funding models: all or nothing or all
and more. The all-or-nothing funding model, employed by Kickstarter, requires all
funds to be returned to the supporters if the creators do not reach their stated goal
[Kickstarter 2013]. The all-and-more funding model, employed by RocketHub allows
creators to keep all funds even if their funding goals are not achieved [RocketHub
2013; IndieGoGo 2013]. If the goal is reached, platforms require the creators to pay a
platform usage fee to the crowdfunding platforms for services (between 3% and 9% of
funds raised) and payment processing fee (between 3% and 5% of funds raised) to an
established online payment processing system, such as Amazon Payments or PayPal
[Kickstarter 2013; RocketHub 2013; IndieGoGo 2013].
3. RESEARCH ON CROWDFUNDING
Despite the growing popularity of crowdfunding, there is little scholarly research in
this domain. Economists have noted that crowdfunding avoids some of the barriers
that can impede offline financial transactions and that crowdfunding can be used
by creators to disseminate product information, increase consumer awareness, and
estimate consumer willingness to pay [Belleflamme et al. 2010]. Crowdfunding can
also provide insight into the experience goods market, where some have argued that
participation is governed more by peer effects than network externalities [Ward and
Ramachandran 2010].
Despite the link between motivation and contributions to online communities [Kraut
and Resnick 2011], few HCI scholars have investigated motivations for crowdfunding
through online platforms. In a 2010 study, Lambert and Schwienbacher analyzed results from a questionnaire taken by 21 entrepreneurs, only three of whom used an
online platform to seek funding [Lambert and Schwienbacher 2010]. The remaining
18 entrepreneurs used personal websites and other online social media tools to crowdfund. Lambert and Schwienbacher concluded that entrepreneurs were motivated to
raise money, get public attention, and obtain feedback. In addition, Schwienbacher
and Larralde also performed a case study of one company that raised money using
crowdfunding techniques [Schwienbacher and Larralde 2010]. Through one interview
with the company founder and a survey questionnaire taken by company supporters,
Schwienbacher and Larralde concluded that the creator participated in crowdfunding
not only to raise funds but also to expand his network, while supporters expressed the
desire to partake in the “exciting adventure of building a startup” and also to expand
their network with other supporters.
In an exploratory study, Muller and colleagues at IBM Research allocated money
to 511 employees at IBM Research to better understand “enterprise crowdfunding”—
or crowdfunding within an enterprise [Muller et al. 2013]. The research team asked
employees to “spend” money on employee-initiated proposals posted on an intranet site.
The trial resulted in proposals that addressed diverse individual and organizational
needs with high participation rates. Further, they found that “enterprise crowdfunding”
supports interdepartmental collaboration, including the discovery of large numbers of
2 Success
rates for other platforms are not publicly available.
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previously unknown collaborators and the development of organizational goals [Muller
et al. 2013].
Our work extends prior research by exploring the factors that motivate or deter participation among crowdfunding creators and supporters. In this study, we investigate a
sample of online crowdfunding users who either launch or fund projects on crowdfunding platforms. By studying independent creators and supporters who use crowdfunding
platforms, we hope to gain a broader understanding of the community. Findings from
our research can inform the design of new tools to support the growth of crowdfunding
platforms.
4. RELATED RESEARCH
Crowdfunding combines elements of online philanthropic behavior, online consumer behavior, online peer-to-peer lending, and online peer production. Therefore, we examine
research from psychology, marketing management, economics, information science, and
human computer interaction. In each case, we seek to sharpen our theoretical expectations for why people choose to participate or refrain from participating in crowdfunding.
4.1. Online Philanthropic Behavior
Online philanthropy is online giving of financial and social capital to promote human
welfare. Researchers find that supporters are motivated to give because of feelings of
sympathy and empathy toward the cause [Rick et al. 2007], feelings of guilt for not
giving [Cialdini et al. 1981], and hopes of strengthening their social identity [Aaker
and Akutsu 2009] and social status [Becker 1974; Glazer and Konrad 1996]. Management scholars find that nonprofit organizations are motivated to fundraise online
predominately because it allows for the easy and safe transfer of funds from donors
[Waters 2007]. Many crowdfunding projects are framed as philanthropic, and as such
we expect some of the same motivations to figure into crowdfunding as they do in online philanthropy. For nonphilanthropic crowdfunding projects, we expect feelings of
empathy and guilt to be less relevant, while social identity and social status concerns
may figure more prominently.
4.2. Online Consumer Behavior
Crowdfunding can be framed as a type of market, where creators produce and market their ideas or products and supporters consume them. Thus, aspects of marketing
and consumer research are relevant to understanding motivations for participants in
crowdfunding. Psychologists and marketing scholars find that goals, information and
affective processing, involvement [Jenkins 2009], and perceptions of choice [Iyengar
and Lepper 2000] are key drivers of the consumer decision process. Research in information systems and management find that online consumption is facilitated by
perceptions of Internet security and by navigation functionality [Chellappa and Pavlou
2002; Kim et al. 2011; Sefton 2000; Miyazaki and Fernandez 2001]. Many of these
relationships interact with context and user type: economists, for instance, find that
novice Internet users make purchase decisions based on brand recognition but become
less trusting of brands as they become more proficient with Internet searching [Ward
and Lee 2000].
Similar to e-commerce, crowdfunding platforms allow supporters to safely and easily
exchange financial resources for a particular product, service, or experience again
and again. Unlike on e-commerce platforms, such as on Amazon.com, crowdfunding
supporters often pay to receive a product many weeks or months prior to its production,
and there is always a risk the product will not come into being at all. We expect concerns
about trust to be relevant for crowdfunding supporters who give in exchange for a
specific reward.
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4.3. Online Peer-to-Peer Lending
The interpersonal creator-to-supporter intimacy that exists on crowdfunding platforms
also resembles elements of peer-to-peer lending, another nascent phenomenon similar
to crowdfunding, in which individuals bid on microloans sought by individual borrowers. Like crowdfunding, few peer-to-peer lending sites existed before 2005, and thus
scholarly research on the phenomenon is currently scant. Like peer-to-peer lenders,
supporters on crowdfunding platforms take a financial risk when giving money to a
project creator. Unlike peer-to-peer lending sites, supporters do not expect to be repaid monetarily. With regard to the motivations that drive individuals to engage in
peer-to-peer lending, scholars of information science and computer science find people
are more likely to lend money to peers who share reputable hard information in their
extended network [Lin et al. 2009], such as those with a good credit score [Potzsch and
Bohme 2010]. These researchers find that soft information, such as personal information, leads to a more positive perception of the borrower, but it is not enough to reduce
borrowing interest rates [Potzsch and Bohme 2010].
4.4. Online Peer Production
Among the phenomena we have addressed thus far, online peer production for crowdsourced platforms, such as Wikipedia, is the one where scholars have shown the most
interest in understanding the issues of motivation for participating online. Both the apparent surprise of individuals working without financial compensation and the prospect
of leveraging the collective intelligence and efforts of the crowd to tackle the world’s
problems have attracted the observed scholarly attention [Malone et al. 2009]. Scholars
have identified a variety of motivations for contributing to online communities including participants’ anticipation of learning, increased social standing, peer companionship and approval, autonomy, and the prospect of improving society [Kraut and Resnick
2011]. While the aforementioned motivations are all located in the individual, scholars
have also noted a variety of relational mechanisms that affect participation; these include recruiting and clustering similar others to increase identity-based commitment,
careful socialization and integration of newcomers, encouraging commitment over time,
and coordinating contributions to maximize benefits for the community [Resnick and
Kraut 2011].
While this research has highlighted the critical role of recruiting and retaining members of voluntary and “free” online communities primarily organized around knowledge
sharing, few researchers have examined the role of recruiting and retention in the
crowdfunding context, which is characterized by the sharing of information and financial resources in exchange for rewards. Like communities built on peer production, we
expect that crowdfunding platforms rely on similar individual and relational mechanisms to motivate creator and supporter participation.
5. METHOD
5.1. Study Design
We followed a grounded theory approach and performed semistructured interviews
with a representative sample of participants from the crowdfunding community, a
common method in qualitative studies in human computer interaction [Bailey and
Horvitz 2010]. As is typical with grounded theory [Glaser and Strauss 1967], this
study was initiated with open qualitative data collection. Given the limited research
in this domain, we did not want to propose specific hypotheses about what was to be
found and unnecessarily constrain the emergent framework by precisely identifying
and operationalizing variables [Glaser and Strauss 1967]. The study was framed with
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a broad research question: What motivates and deters creators and supporters
from participating in crowdfunding?
An examination of a diverse set of participants including all types of creators and
supporters from multiple platforms and project categories in the crowdfunding community is needed to provide a rigorous framework for why people create and support
projects on crowdfunding platforms. Gathering contextual details about motivation will
inform our three empirically grounded design principles for crowdfunding.
5.2. Participants
We interviewed 83 US-based participants (21 women) over an 11-month period. Two
participants had exclusively created projects; 10 participants had exclusively funded
projects; 48 participants had both created and funded projects. We also interviewed 20
participants who considered participating in crowdfunding (as a creator or supporter)
but decided against it.
Creators launched projects from the categories of Art (7), Comics (1), Dance (1), Design (15), Education (1), Fashion (2), Film & Video (7), Food (4), Games (10), Music
(3), Photography (3), Publishing (6), Science (4), Technology (1), and Theater (3), which
cover the main categories on the crowdfunding platforms that we observed. Approximately 50% of project creators met their fundraising goal on at least one of their
projects. Thirteen creators launched more than one campaign, ranging between one
and nine campaigns per creator interviewed. Most creators held a full-time profession
outside of their campaign while dedicating between 30 minutes and 11 hours a day
on weeknights or weekends working on their crowdfunding project. Three informants
relied on launching crowdfunding campaigns as their primary source of income. Creator ages ranged from 20 to 52 years and creators raised between $71 and $313,371.
Supporters funded projects from all the main categories on the crowdfunding platforms that we observed, supporting between one and 81 projects with a mode of one.
Supporter ages ranged from 20 to 59 years, and supporters donated between $5 and
$250 dollars with a mode of $10. We find that our sample of crowdfunding participants
is representative of the crowdfunding population [Kickstarter 2013].
We selected participants from Kickstarter, RocketHub, and IndieGoGo because they
are the most popular and successful platforms in the United States [Alexa 2013]. Fifty
percent of participants were recruited through random sampling and 50% through
snowball sampling, which allowed us to identify both typical and unique members of
the community. Participants were not compensated for their participation.
5.3. Procedure
We used semistructured interviews to collect data. Each interview began with an
explanation of the method and a description of our research interest in crowdfunding.
We explained that we would be recording and transcribing interviews, and that we were
not paid consultants or evaluators for any crowdfunding platform. We guaranteed that
no informants’ names, titles, project titles, or positions would be revealed. We reiterated
our commitment to objective recording and anonymity throughout the data collection.
Our semistructured interview protocol was divided into three sections. In the first
section, we asked participants about their professional background and the project with
which they were involved. During the second phase, we asked participants to describe
their introduction to crowdfunding platforms and current involvement. During the
third and final phase, we asked them their motivations to make the choices they made
and to share any additional comments.
The average length of the interview was 30 minutes. Sixty-four of the interviews
were conducted over Skype or phone due to the wide geographic distribution of participants. The remainder of the interviews were conducted face to face. All interviews were
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audio-recorded and transcribed for analysis immediately following the interviews. Interviews were conducted at different stages of the crowdfunding process (before, during,
and after their campaign) to understand if motivations differed over time. The advantage to this research approach is the ability to collect in situ data, not just reflective
data; the disadvantage is that bias is introduced through self-report and participant
observation [Spradley 1980].
5.4. Data Analysis
We employed selective coding and analysis [Spradley 1980] to understand what motivated or deterred participation in crowdfunding. First, we began a process of selective
coding in which we flagged each instance where informants communicated motivations
or deterrents. After identifying all of the instances, we clustered motivations and deterrents into conceptual categories. Simultaneously, we researched pertinent literature to
understand existing theory and uncover related phenomena. Initial data analysis began after 14 interviews. The remaining interviews were used to gather data pertaining
to emergent themes [Mintzberg 1979]. Moving between inductive and deductive thinking, we uncovered motivations and deterrents for participation. This iterative process
allowed for the development of initial inferences. We reviewed all relevant data and
evaluated the strength of our evidence to inform whether inferences should be modified
or abandoned based on insubstantial evidence. Coding was performed in parallel cycles
where two researchers independently identified codes based on emergent themes. Both
researchers then met once a week to compare codes and establish agreement. This
pattern was repeated until all interviews were reviewed and the categories of themes
stabilized and enforced with quotes.
The next section presents these themes grounded in data collected during the interviews. All quotations are directly transcribed from interviews without grammatical
corrections. We believe these themes present a grounded theory for why people are
motivated to participate or deterred from participating in crowdfunding.
6. CROWDFUNDING MOTIVATIONS AND DETERRENTS
We present evidence from the semistructured interviews with the creators, supporters,
and those who chose not to participate. First, we discuss motivations to become a creator, including a desire to raise funds, expand awareness of work, connect with others,
gain approval, maintain control, and learn. Second, we present findings on motivations
for supporters, including a desire to collect rewards, help others, support causes, and
be part of a community. We conclude with findings on deterrents for participation in
crowdfunding. While we categorize motivations and deterrents as distinct from each
other, in reality, they are interrelated [Reiss 2004]. We present the findings in the order
of prevalence for creators and supporters (Table I).
6.1. Motivations to Become a Creator
6.1.1. Creator Motivation: Raise Funds. Creators are motivated to use crowdfunding platforms because it provides an easy, efficient, organized way to solicit and collect financial
support from many people in a distributed network. By using web-based technologies,
such as online payment systems and social media, creators are able to market and solicit resources safely and easily through crowdfunding platforms. A creator of a theater
project described:
“[Crowdfunding] was good for us because we didn’t have a way to collect money.”
Crowdfunding is particularly useful for people who are unable to get financial support
from traditional funding sources, such as banks, angel investors, and venture capitalists. Instead of raising a large sum of money from one person or organization, creators
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Table I. Motivations and Deterrents to Crowdfund for Creators and Supporters
Creator
Supporter
Motivations
Raise Funds
Expand Awareness of Work
Form Connections
Gain Approval
Maintain Control
Learn New Fundraising Skills
Collect Rewards
Help Others
Be Part of a Community
Support a Cause
Deterrents
Inability to Attract Supporters
Fear of Public Failure and Exposure
Time and Resource Commitment
Distrust of Creators’ Use of Funds
report being able to raise similar sums of money through a large number of supporters
contributing small sums. A creator of an educational toy explained:
“Instead of having one or two angel investors or manufacturers, you have like 50,000 micro-investors.”
In addition, unlike applying for grants, which are not always approved, certain crowdfunding platforms, such as IndieGoGo and RocketHub, allow creators to keep all of
the funds they raise. A researcher described his return on investment by launching a
crowdfunding campaign:
“I’m batting 100% in terms of getting a couple of thousands of dollars.”
Some creators are also motivated by the potential to raise funds quickly—perceiving
crowdfunding as less time consuming than some other traditional fundraising methods, such as holding a fundraising event. A choreographer who raised approximately
$16,000 on a crowdfunding platform reported:
“[A fundraising event includes] an auction, entertainment, food, bar, getting the space, decorations, invitations. All that easily takes 100 hours. The [crowdfunding] campaign took somewhere between 40–
50 hours. There’s no way you could do an event for that little time.”
A game designer explained that other fundraising sources required extensive applications and if approved, required months of waiting before actually receiving the funds.
He described how he was motivated to crowdfund because the financial response was
more immediate:
“We needed to make a lot of money . . . in a short period of time, and we didn’t have enough time to reach
out to a foundation, or a grant or whatever . . . they told us we had to fill out a bunch of forms. It was just
so complex; We decided . . . let’s just go straight to the people.”
The game designer was motivated by not only the potential speed of receiving funds
but also the idea that supporters were able to choose or not choose to give.
“It feels, you know, democratic. They can choose to give or not to give.”
Creators are motivated to participate in crowdfunding because they were able to
request and receive financial support directly from many individuals in a distributed
network. Creators perceived the method as efficient, given their limited time, and fair
to people in their network who may decide to give or not give. These transactions are
made possible by web technologies such as online payment systems and crowdfunding
platforms.
6.1.2. Creator Motivation: Expand Awareness of Work. In addition to raising financial resources, creators are motivated to expand awareness of their work by publicizing their
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crowdfunding project. Unlike traditional fundraising methods in which only the application reviewers read about the project, crowdfunding provides an avenue for anyone
on the Internet to view one’s project through a brief video and written description.
Creators expand awareness by posting links to their project in social media and sending emails about their campaign to friends, family, and news media outlets. A dance
project creator described how crowdfunding provided dual benefits of raising funds and
spreading awareness:
“[Crowdfunding] is actually a really great way that we got more people to learn about our project. You do
[crowdfunding] to fundraise, but you also do it for marketing to let people see [sic] about your project.”
Another creator of a mobile app project described how he used crowdfunding solely
to spread the word about and distribute his project:
“We didn’t even really care if we got money because [our product] is such an insanely low cost thing to
run. So, we ended up just doing crowdfunding in order to get [our product] out.”
We found that some creators were motivated to use crowdfunding because of the
potential to receive attention from the popular press. An anthropological researcher
described how she was motivated to use her crowdfunding campaign to expanded
awareness of her research beyond her academic peers:
“CNN covered [my research], and Forbes covered it. And then everything just went crazy after that. . . .
These are things that don’t normally happen if you just have a grant proposal, or you have an article in
the journal, you know, that maybe nobody reads.”
By reaching out to the general public through news media, crowdfunding allows
people to raise awareness with people with whom they are not closely connected. These
people have the ability to reach new groups of people with whom the creator is not
directly connected [Granovetter 1973]. In the popular press, creators advise reaching
out to many different audiences to amplify their reach [Burt 1992]. A creator who
posted her nonfiction writing project on a crowdfunding platform explained:
“I really wanted to use it more as a way of sharing the project with a different audience. Most of the
donors are not really like my closest friends. They’re kind of on the outer rings of my universe.”
Creators are motivated to expand awareness of work beyond the close social network.
With crowdfunding, creators are given the opportunity to market their projects to the
general public through social media and popular press.
6.1.3. Creator Motivation: Form Connections. In addition to raising funds and expanding awareness of work, our data suggests that creators are motivated to engage in
crowdfunding to connect with people through a long-term interaction that extends well
beyond a single financial transaction. Because crowdfunding platforms store supporter
contacts and provide online messaging services, creators are able to easily communicate with supporters in answering questions and giving project updates. A creator of a
board game project described his connection with supporters:
“[The funding process] creates a longer-term connection to people that, you know, weeks later, months
later, you’re still interacting, and they are expecting to get something. . . . You can build relationships with
people, you know, over the course of time.”
Such long-term interactions allow creators to collaborate directly with supporters,
engaging them in the creative process. A product designer asked his supporters which
color binding they preferred for his winter sports gear product after showing them pictures of the production prototypes in a project update. A creator of a community design
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project described her preference for consumer engagement throughout development.
She noted:
“[Participating in crowdfunding] made me realize that I don’t want my projects to be like only mine. . . . I
want others to share in my projects.”
Crowdfunding platforms provide an easy avenue for communication and financial
transactions between creators and a large group of people. For instance, some creators
use crowdfunding to find more interested consumers in an effort to presell their product.
One creator of a product design project reported:
“[My project partner] already had enough interest that she knew that she wanted to go [through] with
manufacturing. Essentially, we used crowdfunding to generate more preorders.”
In contrast to traditional marketing methods, crowdfunding provides a quick and
alternative way to advertising a product and building a fan base. A creator of a game
project explained:
“You’re building this group of people who are very enthusiastic about your idea. It can take years for a
company to develop a fan base, but [with crowdfunding], you get these people who get in on the ground
floor.”
The long-term relationship stands in contrast to the short-term relationship that
occurs in many online financial transactions, such as buying a product on the Amazon
marketplace. However, this desire for social contact and peer companionship is consistent with many online communities that are not focused on financial transactions,
such as online discussion communities [Kraut and Resnick 2011].
Creators are motivated to make connections with not only their supporters but also
other creators, which they see as similar to themselves. One creator described the
experience of meeting a fellow creator:
“There’s definitely . . . a secret handshake. . . . If you met someone who created a [crowdfunding] project,
you immediately have something to talk about. . . . You can cut through any degree of small talk and talk
about . . . something you really, truly care about.”
The shared experience of crowdfunding connects creators on- and offline and allows
for collaboration and informal learning. An interaction designer describes his relationship with other creators online:
“It’s a give and take. Like, they ask me for advice and I look at their projects for advice. . . . Every week
or so, somebody emails me asking questions about [crowdfunding], like, ‘My project got rejected by [a
crowdfunding platform], how do I redo it?’ And I’m like, you need to change this, this and this. . . . I can
help you with that.”
In summary, creators are motivated to participate in crowdfunding because they can
expand their fan base and connect socially with like-minded people through an extended period of online engagement. Creators form connections through crowdfunding
platform communication mediums, through social media, and face to face.
6.1.4. Creator Motivation: Gain Approval. In addition to raising funds and awareness and
establishing connections, the data suggests that creators are also motivated to satisfy
a desire for approval—both for the self and for their work. The number of supporters
and amount of dollars raised are often seen as a quantification of the value of one’s
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project. A writer describes how the community’s approval increased her confidence in
her work through online conversation:
“You sort of wonder if people are going to like you and like your work, and so I definitely got more
confident once people were clearly interested in it and clearly engaging in the dialogue and supporting
me financially.”
In some cases, the desire for approval was a higher priority than the desire for funds.
A nonfiction project creator commented on how community support gave her confidence
to complete the project:
“The funny thing is, I probably gave other people as much money as I’ve just made on this [crowdfunding]
campaign. So, I could have kept that money in my pocket. But, the whole thing is like, a load of confidence.”
Creators seek funds from a community of people who care not just about the project,
but also about the individual’s success. People’s beliefs in their ability increase when
they have successful experiences and receive public recognition of their success [Lin
et al. 2009]. A creator describes how crowdfunding provided validation:
“You are embedding yourself in an active community. . . . You are being validated. . . . Friends and families
become evangelists for you. . . . You have people saying, I believe in you.”
Online encouragement and financial backing supports perceptions of approval, which
strengthens beliefs in ability to complete a task [Lin et al. 2009]. A creator describes
how approval of his first project convinced him to start a second:
“I don’t think I would have been as empowered to go out and do [my second project] so much if I hadn’t
had the success with the first project. . . . It’s all about forging relationships with people and encouraging
them.”
Approval for an idea can also be considered as positive feedback on one’s project. A
creator describes how he uses funding success to minimize risk long term and determine
that his work is worthwhile to pursue:
“I have no idea if people will want [my product]. So like if people don’t want to buy it, and they don’t like
it . . . there won’t be any. Then I won’t have made them. . . . It’s just an incredible way to take a risk and
it’s a totally safe risk to take.”
Creators are motivated to participate in crowdfunding to gain approval for themselves and their work. The approval can come in the form of monetary backing, evangelism, and feedback. Unlike in other online communities, monetary backing strengthens
validation. Crowdfunding platforms provide a unique opportunity to satisfy multiple
motivations that traditional funding mechanisms, such as grants and venture capital
funding, and online social communities do not necessarily satisfy.
6.1.5. Creator Motivation: Maintain Control. Furthermore, we find that creators are motivated to participate in crowdfunding to maintain control over their work rather than
forfeiting control to the investor. Unlike many traditional fundraising methods, funding is not contingent upon a select group of people’s preferences, such as those of an
angel investor or venture capitalist. For example, a video game designer explained:
“In game development, the problem is, publishers like Electronic Arts or anyone else invest in developing
studios, so they get to say what they do, and they also get creative control over a lot of stuff because of the
contracts they sign. And this way [through crowdfunding], it’s the gamer that decides which projects they
want to do, what they want the developer to do, and that’s a big deal for us because we never had a say
in any of it before. It’s usually the guys with the billions of dollars that make all the decisions for us.”
Before crowdfunding, creators often had to trade project control for funding and other
benefits associated with working under a large label. Now that crowdfunding provides
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an alternative way to raise funds, creators have more freedom in deciding which
development route to take. However, autonomy may come at a cost. One nonfiction
project creator described the tradeoffs he made to maintain control of his work:
“Creative control [and] editorial control. . . . You gain those in self-publishing, but you’re trading marketing, an entrenched network of contacts, trustworthiness from being associated with an established
label. . . . I prefer the tradeoffs that I’ve taken for what I’m giving away.”
Our findings suggest that maintaining control over one’s project is often more valuable than institutional legitimacy associated with a major producer. As crowdfunding
is becoming more well known, platforms themselves often provide institutional legitimacy that manufacturers once did.
Maintaining control gives people confidence in their ability to accomplish a task
on their own, thus building self-efficacy [Bandura 1997]. A creator of a food project
described the exhilaration of working on her own terms:
“It was this whole fearless approach. . . . It just kind of made me feel like, I can do anything, and I should
do anything. Like, no one should be held back by you know, whatever. That was the first lesson for me,
was just going for what I wanted with the support of the community with me.”
Creators are motivated to participate to maintain control—making choices about the
direction of the work. Autonomy supports feelings of competence and allows creators
to execute their project true to their vision.
6.1.6. Creator Motivation: Learn New Fundraising Skills. Having control over a crowdfunding
campaign forces creators to gain experience in areas outside their professional expertise. Although creators did not initially report being motivated to learn, those who
had completed campaigns, both successes and failures, were motivated to participate
again to improve skills to fundraise effectively, such as marketing, communication,
management, risk taking, and financial planning. As one creator noted:
“I went to art school. I went to graduate school. We didn’t have one single class on fundraising. We didn’t
have anything on business at all. And I just think if you’re going to make it as an artist, . . . it’s also
about being persistent and strategic. [Crowdfunding] is a really do-able way to really practice and hone
[entrepreneurial] skills.”
In addition to getting hands-on business experience, crowdfunding also offers a key
source of feedback that helps everyday people learn about the novelty and usefulness
of their ideas in addition to providing a platform for implementation. Posting a project
on a crowdfunding platform requires creators to address a general audience. A creator
of a research project explains how posting on a crowdfunding platform required her to
learn how to frame her work for different audiences:
“I really think [crowdfunding] helped me communicate with the public and get them interested in my
work.”
To communicate this work, creators learn new forms of communication in which
they did not have prior experience, such as videography, photography, and writing for
the general public. A creator reported enjoying learning how to make a video for her
crowdfunding page:
“I’ve never made a video before for my research. . . . It was really a lot of fun, so I really enjoyed that. That
was not something I had ever done before.”
Creators also learn what kind of language to use in their pitch. One informant noted:
“I learned all of those tips about, you know, keeping things very progressive sounding, and keeping the
vocabulary very positive versus desperate.”
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Informants reported the usefulness of learning new ways of communicating in order
to reach a larger audience. Each of these creators described how they plan to utilize
these learned business and communication skills and strategies in the future if they
start another campaign.
Overall, creators are motivated to participate in crowdfunding to raise funds, expand
awareness of their work, form connections with others, gain approval for their work and
themselves, maintain project control, and learn new skills. Crowdfunding platforms
provide a unique opportunity to satisfy multiple motivations that traditional funding
mechanisms do not necessarily satisfy. The next section reports findings of the research
on supporters, those who provide resources to the creators.
6.2. Motivations to Become a Supporter
6.2.1. Supporter Motivation: Collect Rewards. One motivation of supporters in crowdfunding communities is the desire to collect external rewards such as an acknowledgment,
a tangible artifact, or an experience. An acknowledgment may come in the form of a
telephone call, while a tangible artifact may be a CD or gadget. An experience may
involve, for instance, meeting with the creator. The creator’s goal is to provide rewards
that satisfy the supporters’ desire to collect. A person who funded an iPad accessory
describes his anticipation to use his future reward (the accessory):
“I like to buy things that I can play with.”
Many supporters refer to the transaction as “buying” and “getting,” suggesting that
crowdfunding shares some elements with the consumer experience. However, unlike
most transactions in the formal economy, supporters give money and then wait for
several weeks or months before receiving their reward. Waiting is a common practice
in the informal economy, which, unlike the formal economy, is not taxed or monitored
by government. For example, a person may pay his or her friend to create a custom
bike frame in the friend’s garage and wait months before receiving the finished product.
The supporter puts forth funds prior to product creation, trusting that the creator will
deliver on his or her promise.
Even though supporters may delay gratification, they are motivated to increase their
funding amount to get a desired reward. This suggests that supporters are aware of the
value of the product, service, or experience that they will receive in exchange for their
financial support. A supporter who contributed funds to a documentary film project
commented:
“I’m not going to give them 5 dollars, I’m going to give them 10 dollars because 5 more dollars will give
me a high definition download of this film. That’s worth it.”
Supporters exhibit consumer behavior, expressing interest in receiving a reward in
exchange for giving money. However, the fact that they are willing to pay prior to
reward creation and wait weeks or months sets this type of transaction apart from
traditional consumer transactions.
6.2.2. Supporter Motivation: Help Others. While many supporters are motivated to collect,
others are motivated to “give.” This behavior resembles philanthropic behavior. Supporters express a strong desire to help creators with whom they have a personal or
extended connection. One supporter explained:
“I’ve funded projects where I have a personal connection to the person making the appeal.”
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When posting projects on crowdfunding platforms, creators learned about supporters
who had wanted to support them but previously weren’t able to do so. An oceanographer
noted:
“It turns out that there were a lot of friends and family that wanted to support what I was doing and
didn’t have an avenue to do so. [Crowdfunding] provided an avenue.”
Yet, the connection to the creator is not always personal. In one example, the keyboardist of the British band Marillion explained to his fans that the band could not
embark on a US tour for lack of funds. In response, the fans created a crowdfunding campaign and raised more than $60,000 to fund the tour [Spellman 2013]. Fans
contributed time, effort, and money to help the creators.
Our data also suggests that supporters can be willing to prioritize others at their own
expense to help a friend in need. A supporter described how she decided to monetarily
support her friends even though she had limited financial resources:
“After having lost my job in May, I haven’t had any extra money whatsoever. I hardly have five dollars to
my name. . . . But, for the most part, if a friend is in need I’ll try to help him out as best as I can.”
Supporters are also willing to support people they do not know well. A young professional who supported a journalism project stated:
“It’s [my friend’s] brother, I’ll just give him some money. Like, that will be nice. . . . I think they were pretty
close to their goal, but they hadn’t quite reached it at that point.”
Supporters report the desire to help creators who are close to their funding goal in
hopes that they make a meaningful impact. And they can track the creator’s progress
on the project page. A supporter describes his desire to help a friend who wanted to
sell his music album:
“[His project] was something like $500 short at the time, and I told him, if it doesn’t go over the number
the day before, I will put the rest of the money in. . . . I’d seen him work so hard on this material. It was
really important to me to make sure that the project got funded.”
If a supporter has a personal connection to a creator, he or she is also more likely
to be aware of the amount of work the creator has put into the project. Crowdfunding
provides supporters with a way to support creators with unique ideas. One supporter
of community design projects reported:
“I like supporting creative people that I feel have authentically good ideas and maybe wouldn’t get
mainstream support from the public. So, they might be doing something unusual . . . but you can see that
there is something valuable there.”
When projects are successfully funded, the success is shared between creator and
supporter. Supporters are motivated to help others with whom they are strongly and
weakly tied. These ties could be from friendship and/or shared interests.
6.2.3. Supporter Motivation: Be Part of a Community. In addition to supporting individual
creators, crowdfunding also provides a way to feel part of a community of like-minded
people. One serial technology supporter stated:
“There’s definitely a sense of community . . . some sort of responsibility [to support].”
Supporters express the desire to see evidence of being part of a select group. Crowdfunding platforms achieve this by listing who has supported a project on the project
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supporter page. A supporter of a design project described how she liked seeing a photo
of herself on this page:
“I was like, oh that’s cool that my picture will be on the [supporter page]. So, that’s neat. I’m part of this
community that’s supporting [this project].”
This page allows supporters to easily see who supported the same project. Being part
the project-supporter community also allows supporters to have a say in the design of
the final product. One supporter of a video game project described his interaction with
other supporters in the design process:
“[I follow the campaign] fairly closely. I check the [project website] once or twice a day in the forums and
I interact with the community online . . . mostly the backers. . . . [We] decide which direction we feel the
game should go.”
This aspect of collaborative design is a unique characteristic of the crowdfunding
community. Supporters also report being motivated to support people they trust. One
supporter described how this aspect of trust made him feel more comfortable with
giving money to unknown others:
“I think that all or almost all [projects] were done by people that I don’t know. . . . There’s something about
the nature of [the crowdfunding] community, I’m a little more willing to trust.”
Trust is a common basis for monetary transactions [Gefen 2000], and crowdfunding
platforms are able to foster trust between supporters and creators and other supporters.
Overall, supporters are motivated to participate in crowdfunding because it provides
a visual form of acceptance and gives them a unique opportunity to interact with and
contribute to a like-minded group of people.
6.2.4. Supporter Motivation: Support a Cause. In addition to supporting creators, crowdfunding supporters are motivated to support causes analogous with their personal
beliefs. When asked what types of projects she funds, a supporter replied:
“Design to create social impact. . . . My goal is to be as supportive of these initiatives as possible. . . . From
an identity standpoint, that’s something that I would want to be associated with.”
Identity influences what actions people take and why they give. People support efforts
that are consistent with their identity or the identity to which they aspire [Aaker and
Akutsu 2009]. Some supporters even decide to forgo the reward and have 100% of their
funds go directly to the project cause. A supporter who contributed funds to a weather
prediction application described his frustration with creators who spend money on
rewards that are not directly inline with the success of the project:
“Don’t spend that money on making t-shirts, spend it on building software. . . . I want to see that my money
is being used well.”
Supporters prioritize motives differently. Although some people are motivated to
collect a reward, others are primarily motivated to support a cause. Some creators
consider allowing the creator to maintain project control as one worthwhile reason to
participate in crowdfunding. One technology supporter reported:
“I really like the idea of people being able to get off the ground without needing to buy into a big giant
corporate structure. And I like the way that people put the ideas they want out instead of having to
compromise those ideas in order to get their product out.”
Supporters are motivated to support nontraditional means of production that allow creators to maintain creative control. A supporter of design projects noted the
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differences in community behavior between those who participate in crowdfunding
and those who use more traditional fundraising methods:
“In other domains . . . people could have a tendency to feel competitive with people who are doing something
similar. But, what I think what’s unique about this space [crowdfunding], is people feel more collaborative.
So, I feel more like funding these types of projects as an act of good will, and say like, hey you guys are
doing great stuff. . . . I just wanted to be a part of that uplifting force.”
Cooperation remains a normative behavior for many online communities [Kraut and
Resnick 2011]. While supporters of both causes and creators are primarily motivated by
philanthropic behavior, they often appreciate a memento of their giving experience. A
supporter who contributed to a project that employed local women in Chile commented:
“I thought it would be nice to get something that would remind me of the project that my friend was doing
and kind of connect me to the culture and the community that I was supporting.”
Crowdfunding provides an avenue for supporters to be part of a community of likeminded individuals and express their beliefs through the exchange of resources (primarily financial), whether it is for the creator or project cause.
6.3. Deterrents to Become a Creator
In addition to describing their motivations for participating in crowdfunding, informants also indicated several factors that significantly reduce their likelihood to solicit
resources and contribute. To understand the deterrents to becoming a creator, we interviewed people who participated despite concerns about crowdfunding and people
who considered crowdfunding but decided to use an alternative funding method for
their projects. For creators, these factors included hesitance to publicly solicit funding,
concerns about the time commitment relative to other funding mechanisms, fear of
failure, and concerns about privacy and plagiarism. Supporters were mainly concerned
about waiting for and not receiving rewards and ineffective use of funds. We briefly
discuss findings for creators and supporters.
6.3.1. Creator Deterrent: Inability to Attract Supporters. Many creators chose not to crowdfund because they believed that existing crowdfunding platforms did not currently or
would not attract a sufficient number of supporters to fund their project once launched.
One creator of a web networking application who initially considered Kickstarter but
ultimately chose to pursue another source of funding described his concern:
“[Crowdfunded projects] have to appeal to a large group of people. . . . It has to resonate with large
crowds. . . . We didn’t think [our project] would resonate with a large group of people, specifically the kind
of people that are on Kickstarter.”
Instead, this creator sought $60,000 dollars in funding from an angel investor in
a major metropolitan area. Another creator developing a medical device designed
for nurses and doctors examined past crowdfunding successes and decided against
participation:
“We looked at who has been successful on Kickstarter, and all the ones that have been successful in the past
are like consumer products . . . you know, video game consoles or iPhone accessories and things that the
mass market and consumer market are looking for. . . . We didn’t feel like [our project] would have gotten
enough appeal to have gotten the amount of money we were looking for. . . . There’s a certain type of product
that does well on Kickstarter and there’s certain types of products that don’t do well. And we didn’t think
ours would do well. Nurses would probably get [our product], because that’s who it’s really designed for,
and then maybe mothers and germaphobes. . . . We didn’t see those people visiting Kickstarter.”
Because publicizing one’s project can take up to 11 hours a day, one creator who
needed funds to manufacture a toy for diabetic children described how she felt her
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efforts were best used at targeting her specific audience members face to face at outreach events rather than online through an unfamiliar platform:
“It just was just not the right audience sort of thing. . . . I think [our market] is a little bit challenging
because it is a small population that you need more of the direct approach to make families buy [our
product].”
This creator decided to attend a conference for parents who have diabetic children.
There, the parents were able to pick up and test the product in real time with their
children before putting in an order. Much of these beliefs stem from the idea that crowdfunding supporters are more interested in supporting the product and the process. For
example, creators believe that supporters will only be interested in supporting their
project if they get a reward at the end. Supporting startup processes, such as paying for
office space and prototyping materials, seems less appealing. One creator of a mobile
app project explained how it is difficult to keep up supporter interest once the project
is over:
“I think [crowdfunding] is really good for a one-off product or like, a product that you aren’t necessarily
thinking about expanding into a line, but if you do want to create that brand equity, it’s very difficult to
do that out of a crowdfunding campaign.”
Another creator of a product design project, who chose angel investing over crowdfunding, explained that she did not want to “debut” her product in a crowdfunding
campaign when the final product was not yet finished. Like the previous creator, she
saw launching a crowdfunding campaign as more of a final public presentation than
an intermediate funding step:
“We didn’t want to put an expectation to launch this initial idea when our product is evolving all the
time.”
This creator decided to pursue angel investing instead as she felt that angel investors
were more likely to fund the process rather than the final product. Believing that only
projects with good rewards do well, many creators choose not to crowdfund because
they do not have compelling rewards to give to supporters. One creator of a mobile
application explained his dilemma:
“In order to get the word out, you have to have good rewards. . . . People give money because they want
to preorder these products. . . . So for the particular products that I’ve worked on, there isn’t really much
value . . . for the people to preorder the product because the product is more intangible.”
Another creator who wanted to make a note-sharing application for college students
explained his concerns for not being able to entice supporters through incentives.
“At the stage that we are at, it would be hard to you know come up with a set of incentives that would be
compelling enough to have a really blowout successful crowdfunding campaign.”
Instead, this creator chose to pursue funding from a start-up competition in a major metropolitan area
where providing rewards was not required.
Many creators were deterred from crowdfunding if they felt they were unable to attract their target audience or develop adequate rewards—features that crowdfunding
platforms emphasize as keys to success. Together these findings reinforce the perception of crowdfunding as online platforms for consumer purchases.
6.3.2. Creator Deterrent: Fear of Public Failure and Exposure. Creators also choose not to
crowdfund because they fear public failure and exposure. Potential creators were concerned about ruining chances of future investing, personal embarrassment, and others
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stealing their ideas. A toy designer explained how other investors, such as angel investors and venture capitalists, may be less likely to fund if the creator had failed in
crowdfunding.
“If we did [crowdfund] and we weren’t successful . . . we felt like we’d be shooting ourselves in the foot for
getting money from other sources. So, the other venture funds and angels [would] look at us and then if
we couldn’t pass that crowdfunding test, they might be more reluctant to invest.”
A technologist expressed a similar concern, describing his perception of crowdfunding
success as more indicative of good marketing skills rather than a good product.
“When [crowdfunding] doesn’t work, which is more often than not, the reasons can just be attributed to
‘your product sucks . . . and it will never be successful’ whereas your product might be just fine and you
just didn’t do the campaign right.”
Another creator who is creating a tech startup described the crowdfunding failure
as “bad data” that could haunt her funding endeavors in the future.
“If you don’t do well [in crowdfunding], the data is public and doesn’t go away, so that when you are
trying to fundraise, people will be like, you just failed a Kickstarter campaign, why are people going to
use it. And it’s really hard to back that because it’s pretty harsh data to know whether your product is
going to work or not.”
In addition to worrying about what future investors might think, creators are also
worried about the impressions from their friends and family. One creator described
how she did not want her failure to be on public display.
“I think a lot of the fear comes from the fact that if you don’t meet your goal, you don’t get any money. . . .
The risk is if you publicize to all your friends, all your family, all your colleagues, everyone will know if
you fail.”
In order to avoid public failure, one creator privately sold his car and put the funds
toward his campaign to help him reach his goal. While this case may be extreme,
creators report anxiety about having overestimated the size and commitment of their
supporter community. Supporters indicate that they vicariously experience the success
and failure of the campaigns they fund, suggesting that the fear of failing to meet a
goal is shared among creators and supporters.
Whether they ultimately launched campaigns on crowdfunding platforms or not,
most creators were hesitant to ask their social network for money. One creator of a
publishing project described how crowdfunding felt like begging.
“When I get into this whole scheme that the work is also trying to float on money from my friends . . . it’s
all kind of dirty.”
While the rise of crowdfunding has normalized the idea of asking for small donations
from one’s social network, most creators still report discomfort with asking for funds.
Potential creators report feeling even more guilty about asking for money from friends
who earn less money in their day job than they do. One supporter explained why his
job status prevents him from wanting to become a creator:
“It looks kind of weird for me with a full time engineering job to be asking some of my friends for money
who are less financially secure.”
Crowdfunding exposes not only financial vulnerabilities but also ideas. Creators
report being deterred by the possibility of idea theft. One creator of a mobile travel
application explained his worries about sharing his ideas:
“In some cases, your intellectual property, which is a big part of your business, is a trade secret. And if
you put stuff out . . . people can steal your idea. And in many cases its more of a, who can execute the idea
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quicker or first, and they do it and make the money and then move on. . . . You may not be ready to move
so quickly.”
Some creators try to protect against idea theft by getting a patent prior to their
campaign. However, getting a patent is not an easy process, and applying for it and
defending it may not be worth the effort in order to crowdfund. One creator of a bike
product explained:
“Just because you’ve filed a provisional patent on something doesn’t mean someone can’t take that idea
and run with it.”
Crowdfunding requires massive public exposure, and for many potential creators,
such exposure at an early stage of their work threatens chances of future investing,
reputation in one’s social network, and idea theft.
6.3.3. Creator Deterrent: Time and Resource Commitment. While crowdfunding may be seen
as more efficient for certain creators, such as musicians or novelists, with experience
managing a large number of supporters, it can seem overwhelming to others with
limited experience. Because crowdfunding can involve answering to hundreds and
thousands of supporters, creators report being deterred by the amount of work it would
take to deal with such a large audience. One student creator of a research project, who
had previously tried crowdfunding, described how she chose to apply for grants rather
than crowdfund again because the grant application process took less time.
“So, the grant process seems to be just like shorter and quicker. It’s easier to do when you’re just at a
university, and there’s a ton of grants at your disposal. You can just apply and people are very receptive
when your project is academic. . . . So, that seems to be easier than a crowdfunding campaign that lasts
like, a month, or several months, and involves a lot of planning and a lot of work throughout the process.”
Another creator, who is a PhD student, further compared the benefits and disadvantages of crowdfunding to the experience of writing research grants:
“[For] typical science grants, you put a lot of work into them up front. [For crowdfunding], I felt like, it
was much more time . . . [c]onstantly advertising, networking, encouraging people to go on and donate,
and then responding to a lot of the replies that I was getting. It ate up a lot of time. And then after all
that fun was over, you have all these different gifts that you promised people. . . . In some ways, bang for
the buck financially, it was not as lucrative as getting a grant.”
Creators report spending between 30 minutes and 11 hours a day on their live
campaign, which is a highly varying time commitment. Although some crowdfunding
campaigns may be less time consuming than some traditional funding methods, such
as hosting a fundraising event, it may be more time consuming than others, such as
writing a grant. Despite the time commitment of running a campaign, creators report
receiving the actual funds more quickly through crowdfunding platforms than with
grant funding.
Creators also explain the effort required to manage many supporters. One creator
of a travel product, who chose a startup competition to raise funds over crowdfunding,
explained how the crowd wants to always see progress, which can be overwhelming for
a project creator. One creator of a mobile app project explained:
“So you want to delight your customers, your supporters, and if you’re not ready to go out there, you can
fizzle. People love to see progress and rapid progress, and you’ve got to maintain some momentum.”
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Another entrepreneur described how communicating with many supporters can take
up valuable time, especially when he was busy attending to the other needs of launching
a startup.
“I mean you are busy enough as an entrepreneur. To spend, you know half your day fielding questions or
calls from investors to see if you’re gonna get your product out. . . . Having a lot of investors could be a
real challenge.”
Another creator who had previously unsuccessfully tried crowdfunding described
how he chose not to crowdfund again because he did not want to manage an audience
that was larger than what he and his team could handle:
“We didn’t really have the capability to scale that quickly. . . . So we chose not to do [crowdfunding], just
cause we felt it would have been a big burden on us if we had reached a larger market than we already
had.”
In addition to time commitment, crowdfunding can also require an initial financial
commitment. One creator of a web application who chose a funding competition over
crowdfunding described how he did not have the funds to produce a well-made publicity
video:
“I’ve watched a lot of videos that have been posted on sites like Kickstarter. . . . I noticed that projects . . .
that had really good videos, they did a lot better than those that didn’t. . . . The time and financial resources
required to put into a video of production value is a little bit beyond our means at the moment.”
Knowing how much time and work go into crowdfunding, another creator of a theater
project described how she needed a bigger team to run an effective campaign:
“The starting point should be trying to pull your team together, because you are in so much better of a
position when it comes to fundraising”
Some novice creators who have access to university funds and student-focused competitions have described how these alternative funding sources are more straightforward
and provide more mentorship than crowdfunding. One creator of an online application,
who chose to do a funding competition instead of crowdfunding, described how funding
competitions are better options for people who are novice project creators:
“There’s mentors that are assigned throughout the competition. People are dedicated to kind of check in
on you and see how you’re doing, whether or not you have questions. . . . I think with crowdfunding, I set
my own deadline, I set my own goals, and so I guess it’s targeting different audiences. I think if you’re just
starting, the prior (competitions) would be really good. If you’re like a distinguished artist, or you already
know what you want, then crowdfunding would be a good way to go about it. . . . With crowdfunding, it’s
a little more ambiguous in terms of what your responsibilities are.”
As this creator described, crowdfunding platforms provide little personal mentorship
during the crowdfunding campaign. Often platforms only provide a question-answering
service, which may take weeks if not longer for them to respond. By that time, the
creator’s campaign may be over.
Another creator explained that a lack of guidance after the end of the campaign is
even more of a deterrent. Once the campaign ends, crowdfunding platforms provide
little opportunity to continue publicizing your project.
“Once you get all your preorders through crowdfunding, you’ve used up your entire base of people who
would be willing to buy your product at the level of fidelity that it’s at. So either you need to jump to a
higher level of fidelity or somehow you need to recruit a whole new batch of people who are interested in
your product, which is very difficult to do because you’ve just sort of done this national opening for your
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product. There are a lot of traps involved for crowdfunding that I don’t think a lot of people see, because
it’s not something that people are aware of - that people have made an effort to inform the public about.”
Crowdfunding is described as a public “debut” or “national opening.” Consequently,
creators want to present their best work and many are deterred from participating
if they feel they need more time, resources, and institutional support than what is
currently provided by the crowdfunding platforms.
6.4. Deterrents to Becoming a Supporter
6.4.1. Supporter Deterrents: Distrust of Creators’ Use of Funds. Some crowdfunding platforms allow creators to keep what they raise even if they do not reach the funding goal.
Even though this is beneficial for the creator, some supporters worry that their money
will not be used effectively. One supporter of a community design project described how
she prefers the all-or-nothing funding model to others:
“There’s kind of a sense of security knowing that . . . I’ll only be paying if she meets her goal.”
The all-or-nothing funding model may be one of the reasons that Kickstarter has
enjoyed more success than other crowdfunding platforms that use the all-and-more
model.
Another potential supporter reported her concern about creators’ inability to use the
funds wisely based on an online article she read.
“I read an article recently about Kickstarter and how too much funding has become like a problem because
they get money and they don’t necessarily have the assets to use it. So I think that can be an issue as well.”
Because many creators on crowdfunding platforms have limited business experience,
they often underestimate the amount of planning and time it takes to finish a project
and deliver on rewards. One supporter of technology projects noted:
“Part of the process that’s bad about [crowdfunding] is that it’s new people, and they really don’t have
any idea how long a product is going to take [to make]. So, they often underestimate the amount of time
it takes to get something out.”
A creator of an education project validated this supporter’s complaint when he described how he failed to deliver his rewards due to time constraints:
“The time spent to do [shipping] was . . . like a huge, I don’t know, wake up call. So, at that point, what we
did was we reached out to all our donors and asked them personally, would you mind if we didn’t send
you a prize?”
Since receiving a reward is considered a main motivation for supporters, not receiving
the reward can act as a deterrent for future funding activity. Unlike many peer-to-peer
marketplaces such as eBay, crowdfunding platforms currently do not have “resolution
centers” if a conflict arises.
6.4.2. Summary of Findings. While many creators and supporters are motivated to participate in crowdfunding, many indicate factors that demotivate. For creators, crowdfunding can be both an efficient and an inefficient way to solicit resources; it can be a
way to raise awareness, but at times at the annoyance of supporters; and it can lead to
public success or failure. For supporters, crowdfunding can be a way to support causes
and creators with limited access to traditional funding mechanisms. The downside
is that supporters must potentially accept delays, ineffective use of funds, and poor
communication.
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7. DISCUSSION
With our research we sought to shed light on a critical question regarding a new online social phenomenon [Kraut and Resnick 2011]: Why are people motivated to
participate or deterred from participating in online platforms? We offer the
first in-depth qualitative investigation of crowdfunding communities across several
crowd platforms. By interviewing creators, supporters, and those who considered engagement, we present nuanced qualitative evidence that extends previous exploratory
research on crowdfunding and reveals new findings that fundamentally influence how
we think about motivations and deterrents to participation in crowdfunding.
We validate previous findings [Lambert and Schwienbacher 2010; Schwienbacher
and Larralde 2010] that creators are motivated to participate in crowdfunding to raise
funds, expand awareness of work, connect with others, and gain approval. Our qualitative research substantially refines our understanding of what motivates creators to
participate in crowdfunding, including the prospective benefits of long-term interaction
with supporters and the informational and financial feedback they need to build confidence in the uncertain environment of creative work [Gerber 2011]. We discover two
additional creator motivations—the desire to maintain control and learn—that have
received less attention to date.
Our research also confirms prior work suggesting that supporters are motivated to
participate in crowdfunding to expand their social networks—supporters who provide
monetary, informational, and social support to creators can feel they are a part of a
special community, an outcome that satisfies deep human needs for belonging. We also
explore additional supporter motivations, such as the desire to support causes, support
people, collect rewards, and be recognized.
Crowdfunding platforms depend on the active and engaged participation of both creators and supporters. It is therefore critical to understand both creator and supporter
motivations and deterrents. Our article makes significant strides toward a more complete understanding of the key motivational ingredients affecting the vibrancy and
success of crowdfunding communities.
Furthermore, while crowdfunding is frequently defined as the request for financial
resources on- and offline in exchange for a reward offered by the creator [Belleflamme
et al. 2011], our research suggests that the title “crowdfunding” and its definition are
too focused on the exchange of funds. While resource exchange is indeed crucial to
crowdfunding, our research demonstrates that crowdfunding involves the exchange of
a broader variety of resources that are exchanged both on- and offline [Greenberg et al.].
The exchange of money alone cannot fully explain participation. We present evidence
strongly suggesting that participants exchange resources with the goal of wanting to
learn from and connect with others.
We argue that the rapid rise of particular crowdfunding platforms may be attributed
in part to the way these platforms satisfy people’s social and cognitive needs rather
than in their desire for financial resources alone. Both creators and supporters describe being strongly motivated to learn how to carry out the project themselves, on
their own terms. Traditional sources of financial capital, which might otherwise be used
to procure necessary physical and human resources, also come with constraints. While
traditional financial institutions intend their investment and lending constraints to
reduce risk and increase the chance of project success, many creators prefer the relative autonomy of crowdfunding financing: maintaining control lets creators determine
project direction. In addition, our interviews confirm that creators’ experience of autonomy further amplifies their motivation to learn [Deci et al. 1981].
For supporters, too, autonomy matters, though in the supporters’ case, it is the freedom to choose among creators’ projects that is the source of some of the motivation to
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support crowdfunding. Opportunities for choice and self-direction are found to enhance
intrinsic motivation, learning, and greater feelings of autonomy [Deci and Ryan 1985].
In this regard, then, crowdfunding supporters resemble consumers in the traditional
marketplace [Iyengar and Lepper 2000]: they are motivated in part by perceptions of
control and choice. However, crowdfunding supporters also share similarities with participants in online peer production [Resnick and Kraut 2011; Kraut and Resnick 2011],
as they frequently seek to maximize benefit for the community members rather than
formal institutions. The awareness of community that both supporters and creators
share is crucial and distinctive.
Our study finds that creators and supporters engage in crowdfunding to connect
with others. Creators seek both to expand awareness of their work and to make connections that benefit them professionally and socially: crowdfunding communities provide a receptive network for creators’ aims. Supporters find that supporting causes and
helping others through crowdfunding gives a powerful sense of community, satisfying a
powerful human need for social affiliation. Supporting a cause financially can be a clear
way to signal affiliation with a certain group of people. Marketing scholars find that
people sometimes spend money strategically in the service of affiliation [Mead et al.
2011]. Helping others allows supporters to make stronger interpersonal connections
through altruistic behavior. Furthermore, participating on crowdfunding platforms
further allows supporters to identify with a group of people with similar interests. In
our study, both creators and supporters reported feeling a powerful and unspoken tie
with other creators and supporters, which enhanced their desire to connect and their
sense of mutual obligation. Overall, addressing these desires satisfies basic psychological needs for social contact [Reiss 2004]. Like online peer production communities
[Kraut and Resnick 2011], creators and supporters seek a trusting community of likeminded others. They are motivated to learn from each other, receive feedback, and
expand awareness of their work in a social setting.
7.1. Crowdfunding as a Type of Crowdsourcing
This work contributes to our larger research agenda to examine the role of crowdsourcing in innovation. Such a perspective is critical given the growing research on
online crowd behavior, which will likely change the workflow of creative and routine
work [Dontcheva et al. 2011]. Online crowds can influence how distributed groups of
people can collaborate to get work done on a scale that exceeds individual capabilities.
Platforms that satisfy motivational needs may ultimately encourage a more diverse
group of people to launch their ideas compared to platforms that do not satisfy these
motivational needs. New models of sorting and prioritizing opportunities for supporters may help to direct individuals with particular motivations [Mintzberg 1979]. We
suspect that platforms are already being designed to enhance motivation, which has
been found to be malleable and context dependent [Ryan and Deci 2000].
8. DESIGN PRINCIPLES FOR CROWDFUNDING
Practically, our investigation offers insight into how to effectively recruit and retain
creators and supporters in crowdfunding activity. Based on research and related literature, we offer preliminary design principles for crowdfunding.
These three design principles are specifically intended to motivate potential creators
and supporters to individually begin and sustain their involvement in crowdfunding.
Table II summarizes the design principles. For each principle, we briefly present the
underlying motivational mechanism and ground these principles in examples from
existing crowdfunding platforms and online communities.
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Table II. Design Principles for Motivating Participation in Crowdfunding
Design Principle
1
Support resource exchange
2
Support community before,
during, and after
3
Provide transparency
Motivation
Raise Funds (Creators)
Gain Approval (Creators)
Learn New Skills (Creators)
Collect Rewards (Supporters)
Support Causes (Supporters)
Help Others (Supporters)
Form Connections (Creators)
Gain Approval (Creators)
Learn New Skills (Creators)
Expand Awareness (Creators)
Be Part of a Community (Supporters)
Maintain Control (Creators)
Example
Open forums to post and
seek production needs
Platform to support creator
and supporter meet-ups
Presentation of risks in an
easy-to-understand and
nonthreatening format
Fig. 3. Currently, Kickstarter only formally supports the financial exchange of resources online despite
interest by creators and supporters to share human and informational resources before, during, and after
the campaign.
8.1. Support Resource Exchange
Creators, supporters, and platforms should be able to exchange human, information,
and financial resources before, during, and after the crowdfunding campaign. Currently, much of these exchanges are informal. While the platform is built around the
safe and easy exchange of financial resources between creators and supporters (see
Figure 3), the exchange of human and information resources could potentially enhance
a project’s success. Volunteer Match is an example of an online site that supports
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Fig. 4. VolunteerMatch supports the exchange of human resources for organizations when and where they
need help.
the exchange of human resources for organizations and individuals in need (see Figure 4). Further, resources should be available at any time throughout the crowdfunding
process—not just during a live campaign.
The human resources should be available to fulfill tasks associated with creative
production, such as creation, manufacturing, implementation, marketing, planning,
and fulfilling. Information resources should be available to transfer knowledge and
advance explanations. Access to informational and human resources has been found to
have a direct positive impact on persistence in ambiguous tasks [Cohen and Levinthal,
1990; Tushman and Nelson 1990]. A person’s perception of adequate resources may
affect his or her belief about the intrinsic value of the projects he or she has undertaken
[Amabile et al. 1996]. Similarly, researchers of creativity support tools advocate for
including multiple avenues for gathering new resources [Schneiderman 2002].
Example: Open forums to post and seek production needs.
8.2. Support Community Before, During, and After
Crowdfunding platforms could support opportunities to share their work prior to, during, and after the crowdfunding campaign. Prior to the campaign, there should be
opportunities to meet up with potential supporters to increase awareness of the upcoming project. Throughout the project, there should be a variety of easily accessible
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Fig. 5. Online creator/supporter discussion on Kickstarter during the SnowXu project campaign.
Fig. 6. Crowdfunders in Austin, TX, have formed a group via “Meetup” to support each other’s efforts.
channels to raise awareness online and offline. Following the campaign, additional
resources are often needed to keep supporters up-to-date on subsequent progress (see
Figure 5). Informal meet-ups are occurring in cities such as Austin, TX (see Figure 6),
while creators have turned to other social media forums, such as Reddit, to continue
conversations about a project after the campaign.
People are more likely to persist when they publically commit beforehand and then
share small wins with others throughout the effort [Weick 1984]. Through the sharing process, they receive positive validation and are more likely to believe they can
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accomplish a task, are willing to take on more challenging work, have greater intrinsic motivation to complete a task, persist in the face of challenges, and expend more
effort in the task [Bandura 1997; Deci and Ryan 1985; Schunk 1985]. Prior HCI research recommends that online communities encourage new members to observe and
learn, and experts to share and grow, allowing everyone to contribute when and how
they feel most comfortable [Jenkins 2009]. Peer production communities encourage
recruiting and clustering similar others to increase identity-based commitment over
time and coordinating contributions to maximize benefits for the community [Resnick
and Kraut 2011]. Community can provide encouragement, feedback, and inspiration
[Amabile et al. 1996; Parnes and Noller 1972]. While consistent with HCI research,
this principle emphasizes ongoing community creation.
Example: Platform to support creator and supporter meet-ups.
8.3. Provide Transparency
Crowdfunding supports new behaviors. We must be concerned with how creators and
supporters understand the implications of their new behaviors on crowdfunding platforms. Copyright, or permission granted to the creator of an original work, is a particular area for concern. Creators upload unique content when pitching their work. We
suggest including the legalities in the sign-up process in a way that is enjoyable and
nonthreatening for the creator and supporter. Further, platforms may collect detailed
data on supporters’ personal preferences and funding amounts. Like the copyright
issue, this issue is not always apparent to the supporter, and educating supporters
about this process is needed. We suspect expectations for transparency will increase
as crowdfunding continues to gain popularity. Companies may change policies due to
creator and supporter demand. This principle stems from the research in psychology
and HCI, which suggests that transparency creates trust, and trust supports future
participation [Gefen 2000].
Example: Presentation of risks to participation in an easy-to-understand, nonthreatening format.
These principles are a call to human computer interaction designers to rethink these
existing approaches to crowdfunding platforms with an eye toward motivating participation and overcoming deterrents. While we offer these broad principles, we also
encourage testing and evaluation in the specific context. During the 2008 Obama campaign, campaign staffers hypothesized that video requests for funds online would appeal to voters. However, Siroker and colleagues discovered through A/B testing that
people were more likely to donate to President Obama’s campaign when the campaign’s
home page showed a picture of the president with his family and a button labeled “learn
more” [Siroker 2010]. Crowdfunding platforms afford such testing.
9. LIMITATIONS
We relied on random and snowball sampling to recruit study participants. Initially, we
found it easier to recruit project creators and supporters who had reached their funded
goal, rather than those who had not reached a goal or decided not to crowdfund at
all. After developing relationships with these informants, we asked them to personally
introduce us to people who had not reached their goal or chosen not to use crowdfunding.
As word spread about our research, informants voluntarily reached out to us to talk
about their experience.
Our informants were restricted to participating in one of three crowdfunding platforms. We chose these platforms because they are the three most popular platforms for
“creative work.” However, there are additional crowdfunding platforms. It is possible
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Crowdfunding: Motivations and Deterrents for Participation
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that participants on other platforms are motivated to participate for different reasons.
It is also possible that platforms motivate participants differently [Kraut and Resnick
2011]. Further, we collected data during 2011–2013 and suspect that motivations for
participation may vary slightly as platforms are redesigned, more people are aware of
the phenomenon, and expectations for participation are altered.
10. FUTURE RESEARCH
Our initial findings suggest a number of areas for future research and design. First,
we plan to examine personal factors that may influence motivations, such as domain
and professional expertise, network [McClure 1994], and web-oriented digital literacy
[Hargittai 2005]. An accomplished musician, for example, who has experience producing albums funded by his fans may have different motivations than a novice product
designer, whose idea was initially rejected by venture capitalist funding. The actual
and perceived size of the creator’s social network and his or her online presence and
funding level may influence motivation to participate. For example, a creator who
requests $5,000 from his small social network that he perceives as large may have
different motivations than a creator who requests $100,000 and tweets regularly with
her large social network before, during, and after the campaign. Additionally, we will
examine how expertise of the creator, supporter, project type, crowdfunding experience,
management skills, social network, and online presence influence motivations in order
to design support tools that sustain engagement.
Second, we plan to investigate how the same individual can participate in three
distinct roles including observer, supporter, and creator. While individuals initiate
participation in crowdfunding in one role, early evidence suggests that they transition
between roles. For example, an individual may start as an observer, checking on a
crowdfunding website regularly to learn about new projects and gain inspiration. After
weeks of observing, she may decide to launch her project. After a successful launch, she
may see a project launched by a person who funded her and may choose to reciprocate
support. We see initial evidence supporting this hypothesis. For example, one creator
reported:
“There’s a kind of etiquette in [my film program]. If someone funded me, then I’m supposed to fund them
back. Otherwise, it would be a little awkward.”
Future work will show how individuals engage in different roles and how the extent
of participation in each role informs future choices.
Third, we will consider the individual strategies people use to engage in crowdfunding
and subsequent entrepreneurial behavior. Initial evidence suggests that creators and
supporters extensively rely on social media to spread awareness of activity and promote
engagement. As one creator noted:
“I’ve been communicating with people through Twitter, I’ve gained a bunch of new Twitter followers, a
bunch of new G+ followers. . . . I put up a website with a blog, and people can comment on the blog. . . . I
wanted to engage the public in a little more of a dialogue.”
While creators primarily want to engage with the crowd, one informant described
designing his page on Kickstarter to minimize the number of comments when he failed
to meet his deadline and felt overwhelmed by the responsibility. He described his
work as “hacking” the interface so that only a few comments could appear at a time.
With fewer comments, he felt there would be less negative emotional contagion and
ultimate dissatisfaction with his work. Creators also describe strategies for fulfilling
orders on time, such as hiring people to work for little to no money as one creator did
who hired teenagers to wrap and send packages of his books to supporters because he
had underestimated the time it would take to fulfill the orders. This future work will
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E. Gerber and J. Hui
examine how individuals choose strategies depending on personal or project-specific
goals. The design of new support tools can augment these goals and strategies based
on technical competency.
11. CONCLUSION
Crowdfunding is fundamentally changing the way people solicit resources from the
crowd to realize new ideas. The crowd contributes millions of dollars each month to
entrepreneurial creators throughout the world. Continued participation can have a
profound influence on the creative economy by influencing how, why, and which ideas
are introduced into the world [Landler 2012], [Obama 2011]. However, human computer
interaction designers have a large unrealized opportunity to design the interactions
between the creators, supporters, and the technology that connects them, to ensure
alignment of motivation among the diverse participants.
ACKNOWLEDGMENTS
We are grateful to Pei-Yi Kuo, Michael Greenberg, Lauren Tindal, and Megan Scherich for their contributions
to data collection, and to Matt Easterday, Bruce Ankenman, Rob Morris, Nick Switanek, Brent Hecht, and
the workshop participants at the 2012 Computer Supported Cooperative Work Workshop in Seattle, WA, for
their thoughtful feedback. The authors are grateful to the informants who participated in the research.
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Received May 2012; revised May 2013; accepted August 2013
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