Crowd Funding Analysis - Based On Kickstarter’s Published Projects
Does crowd funding analysiss which is based on just one platform holds true for all the other platforms out there? Is it right to do just that? Does it reflect the true results of the situation?
Kickstarter as today’s biggest crowd funding platform is one common knowledge in today’s financing industry. This is due to the fact that the said website had already funded several successful projects.
However, it has also its own share of unsuccessful projects. It’s just like all the other small-time crowd funding platforms out there who had its share of ups and downs. All these things make it a good model to base from a crowd funding analysis.
It is true enough that the number of projects on the said website that are able to reach its funding goal is not the same as that of the other platforms out there. How these projects reach its target may differ from one another.
But the crowd funding analysis based from the data gathered by experts may hold true for other projects out there from other platforms. This is due to the fact that there are different factors that affects chances of success of a project.
Now, for the question if its right to conduct a crowd funding analysis with only Kickstarter as based model may or may not be right for some people. But the point is … as it is the biggest platform the data it can provide will be able to give more reliable results. With that, it will yield more trusted crowd funding analysis.
With it the trends and factors that may affect the success of a project will be more identified. In other words, the large sample (that is the quantity of launch projects) will be able to establish more reliable baseline situations. Hence, explain why Kickstarter is the platform of choice in most crowd funding analysis studies.
Results from the crowd funding analysis done by Professor Mollick of University of Pennsylvania and Jeanne who is a blogger lawyer revealed that the base of origin of a platform as well as the preference of its communities can affect the odds of success of projects.
Crowd Funding Analysis On A Project’s Chances Of Success
Professor Ethan Mollick of Wharton University of Pennsylvania is an expert on innovation and entrepreneurship. He studies how an individual/group can affect industries. He is also into research and crowd funding analysis studies of start up’s success.
Together with Jeanne, a blogger lawyer, both of them conducted a crowd funding analysis. They used Kickstarter as based model since it is the biggest platform today. The said study found out that the said website had launched more or less 57, 860 projects.
The crowd funding analysis study found out 99% of the total list of successful projects. There were only 82% found out for the projects that did not reach its target. The former is due to the fact that the said website is said to hide the said list from being crawled.
Result In The Crowd Funding Analysis Study For Those Projects That Did Not Make To Target:
It was found that 25% of the total 82% projects that did not make to target had made it to around 3% of their target fund to raise. There were only 50% who were able to reach 10% of the target amount. Those projects which are able to reach way more than their target are exceptions to the crowd funding analysis provided below.
The result also revealed that more or less 7% – 10% out of the 82% projects that did not make to target were the only ones able to raise 30% of the target amount. There were said to be approximately 3% of those projects that did not make to target amount that are able to reach 50% of the target goal. Now, what do the results in the said crowd funding analysis may indicate? ( See infographic below).
Crowd Funding Analysis:
Projects that will not reach the target will either be funded too low or just half way from target amount. There are only two choices in this venture, it’s either get funded or not. There is no problem with the latter.
But to face the odds of the former it might as well be better if the remaining sum to raise will not be too large. In such case, the project will still be able to take off should you be able to keep the funds even if goal will not be met.
However, with platforms that follows “all or nothing” funding model, the chance of getting funded may prove more challenging. But does this crowd funding analysis mean that project creators will have to avoid platforms of this kind of funding?
Well, no of course. There are other factors that determine the success of a project. For Kickstarter having the biggest supporter community is one edge. It makes projects more likely funded. In fact, most crowd funding analysis studies support that having a wide base of supporters increases odds of success.
Result In The Crowd Funding Analysis Study For Those Projects That Were Funded Way More Than The Target
There were said to be 106 projects found to fund way higher than the set goal. Thirty three of these were found to be large projects. 32 of which are in the following categories such as game and software app, hardware and creative product designs. One out of the said 33 projects is in the music genre.
Crowd Funding Analysis:
Based from the said categories, it indicates preference of the supporting community. This fact indicates that there is/are project genres that the community of backers for a given platform are fond of. Such thing connotes that project which falls into any of the categories that the communities are fond of will likely get more backers.
Does this mean that all of these are the only ones that explain why some project fail to reach its goal? Well, no of course. To reiterate, there are different factors that affect the odds of success of a project. The following aforementioned results of the said crowd funding analysis study are just to enlighten important matters before you crowd fund a project.
Posted by: Misty
Author: Ralf Hooijschuur – Source