Afraid of Niche, Tired of Mass: Atypical Idea Combination on Crowdfunding Platform
37 Pages Posted: 9 Aug 2022 Last revised: 28 Mar 2023
Date Written: August 3, 2022
Abstract
A new idea usually follows a stream of similar ideas yet simultaneously combines atypical elements from ideas outside this stream. A successful business idea usually balances between familiarity and atypicality. To investigate the relationship between atypicality innovation and crowdfunding project performance, we analyzed 1,826 crowdfunding projects with 1,062,182 donors, 1,087 organizers and 281,763 comments on one of the largest crowdfunding platforms in China. By text mining approach, we build a similarity network of crowdfunding projects to measure the degree of atypicality innovation for these projects. Using a double machine learning model, we find that there exists an optimal pattern of idea combination that balances between familiarity and atypicality. The atypical combination of mainstream and niche ideas has a significant positive effect on the individual project’s funding. This type of projects is likely to gain unexpected success, i.e., receives funding that is five times more successful than other projects on average. We also find the potential reasons that cause the poor performance of niche and mainstream projects. Donors are more conservative due to the high risk of niche projects and driven away by the monotonous repetition of mainstream projects. Our work provides key insights on how to generate successful business ideas with atypicality innovation.
Keywords: atypical, double machine learning, crowdfunding, creativity
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