ikosom gets a lot of requests from students abour our Crowdfunding research. And we like to help because the cooperation with students provides lots of great insights. There is one topic, however, where we always get asked a similar question and to avoid writing the same email over and over, I try to answer via a blog post. The blog post is in English because I think that other Crowdfunding Researchers in Europe are also dealing with the same question and I want to invite them to comment.
This is the question:
„I am currently writing a thesis on Crowdfunding and I am researching the motivation for Crowdfunding. There is not much literature and I am conducting a survey – can you please help me?“
The question motivates people in all fields of Crowdfunding. We get art students, literature students, business students, law students, politics students and journalism students to ask us this question, in fact about twice per week. It seems asking „Why do people crowdfund?“ is really at the front of the brain of everyone who researches Crowdfunding for the first time.
Here is my answer:
First, the question is not „Why do people support Crowdfunding projects, but why not?“
There are hundreds, no thousands, of examples where Crowdfunding was used in the last centuries – and way before the Internet came and the arrival of Sellaband, Artistshare, Indiegogo and Kickstarter allowed Crowdfunding online. Humans have worked and cooperated for millenia. There is nothing new about Crowdfunding. Really, the question is: what keeps people from supporting each other? What are obstacles towards Crowdfunding.
It is very simple to tackle this question. You could look at it from a design perspective. You can look at it from a legal perspective. From a cultural perspective. Find the obstacles in Crowdfunding, then you find why people Crowdfund!
Secondly, if you want to get started with this question, then you need to learn about psychology.
I can really recommend reading the Master Thesis of Michel Harms on the Motivation of Crowdfunding. You can read it here: http://www.crowdfunding.de/research/ (Don’t be fooled, the website is not a good crowdfunding knowledge repository – but might be soon.) In a very nice way, he explains a small but also already quite complex model for analysing motivational factors behind Crowdfunding. His model provides a couple of dozen factors that can be an incentive for a financial support through crowdfunding – and that is a lot.
It is vital to understand that Crowdfunding is both a financial tool of fundraising and a social tool of communication. There is no easy answer to say why people use Crowdfunding and there is no easy answer to say why people respond to that.
Thirdly, there is lots of literature. Lots, and lots, and lots. Please explain to me: what can your thesis contribute?
Already in the German-speaking countries, there is a plethora of Crowdfunding literature, some of which can be found here: https://www.ikosom.de/2013/04/07/wir-crowdsourcen-eine-crowdfunding-literatur-liste/
Let’s start with only one motivation: the incentive to get a financial reward, such as interest on a loan. In order to assess that motivation, you need to dive deeply into the literature of financial services, economic theory and psychologic theories around rational behavior. And this is only the starting point why people should use crowdlending, for example.
So, instead of researching an almost unresearchable field, there are lots of topics that need to be researched around Crowdfunding and which are more feasible. We can help find a great research project which is new and interesting. The motivation behind Crowdfunding isn’t such a topic.
Fourthly, if you insist, then at least specify which Crowdfunding you want to research?
We get a lot of requests along the lines of „I want to research on Crowdfunding but I can’t find literature that is available.“ Again, there is lots of literature available, but if you ask us, then please specify which field of Crowdfunding are you interested.
Motivation behind funding a start-up on an equity-platform is hugely different from funding a creative project on a reward-based platform. You need to show that you have already understood that the research in that field is ongoing and that there are established structures, such as this: https://www.ikosom.de/2013/04/08/die-vier-arten-von-crowdfunding-infografik/
You can challenge all that – but imagine you are conducting research around nuclear physics and you approach someone and say: „I want to learn about these tiny spinning things“. The reply would be „Are you talking about molecules, neutrons, protons, atoms, the Higgs-Bosom-particle?“
Fifthly, if you want to do a survey, think first: how would you get the data?
Your study can be a purely theoretical one, that’s good. Your study can be a pure research of the existing literature. That’s great as well. But if you are trying to do some sort of empiricial research, think about how you get your data.
In order to find people which you ask about their motivation to crowdfund a project, you need to get to them. You need to contact them. Here is the problem:
- The platforms can’t give you their user data because that is forbidden, at least if they take data securitiy seriously.
- The projects might be hesitant to give you the emails of their supporters because they don’t want to spam their fans.
- If you just put up a survey and then go around the internet and ask people to fill out the survey, you get a huge bias, because you will only get those people who have had a positive experience from Crowdfunding.
There is, in my opinion, only one way to approach this: in a controlled behavioural experiment with a representative group of people. That would give meaningful data.
Sixthly, if you write about it, then share the results.
There is no point if you just write about it and nobody can read it afterwards. Set up a blog. Include the Crowdfunding community in your thought process. Discuss with us. And maybe asks us and we can point you to an interesting questions that is maybe not so obvious, but still relevant and interesting.
Think about what you can do for us. Here are some examples (but in German): https://www.ikosom.de/2013/06/05/studierende-ihr-wollt-was-von-uns-aber-was-konnt-ihr-uns-zuruckgeben/