A Link to New Product Preannouncement: Success Factors in Crowdfunding

Abstract

Crowdfunding is a process where commercial or non-commercial projects are initiated in a public announcement by organizations or individuals to receive funding, assess the market potential, and build customer relationships. Crowdfunding is employed in a variety of different categories, ranging from technology to arts and even disaster relief. Even though crowd-funding has received widespread attention, not only in the media, literature on the subject is still sparse and lacks especially empirical research. In contrast, research in new product preannouncement is established and more mature, and, due to similarities in process and goals, yields entry points for crowdfunding research. This paper contributes by reducing the gap in crowdfunding research by drawing on insights from new product preannouncement literature. To this end, a common definition of crowdfunding, which is currently lacking in literature, is derived and used to characterize commonalities with new product preannouncement. This theoretical discussion is complemented by empirically testing the derived hypotheses about common success factors. Conclusions are drawn from the logistic-regression, using the technology category of a project dataset with 45,400 observations. Research shows that while timing and communication are key success factors, common to both new product preannouncement and crowdfunding, other success factors may already be standard and cannot separate the successful crowdfunding projects from the unsuccessful.

Keywords: Crowdfunding Definition, New Product Preannouncement, Customer Interaction, Empirical Research