Not entirely the case, check this post to see the specific situation.
Crowdfunding has become a popular way for entrepreneurs, artists, and other creative individuals to raise funds for their projects. Kickstarter, one of the most popular crowdfunding platforms, has helped thousands of campaigns to reach their funding goals. However, not all campaigns are successful, and predicting the outcome of a campaign is not an easy task. In this blog, we will discuss a recent study that sheds light on the factors that determine the success of a Kickstarter campaign and the spreading mechanism of financial support.
The study, titled "Early Prediction of the Outcome of Kickstarter Campaigns: Is the Success Due to Virality?" was conducted by Alex Kindler, Michael Golosovsky, and Sorin Solomon and published in the journal Palgrave Communications in 2019. The study analyzed data from over 100,000 Kickstarter campaigns launched between 2009 and 2015 and developed a predictor algorithm for campaign success.
The study found that the spreading mechanism of financial support for Kickstarter campaigns is not primarily determined by virality, as many people believe. Instead, the success of a campaign depends on appealing to a particular class of backers. The researchers identified three classes of backers: "low-risk," "mid-risk," and "high-risk." Low-risk backers are those who are likely to back a campaign regardless of its popularity or the number of backers it has. Mid-risk backers are those who are influenced by the popularity of a campaign and are more likely to back a campaign that has already attracted a significant number of backers. High-risk backers are those who are willing to take a chance on a campaign that has yet to attract many backers but has the potential to be successful.
The predictor algorithm developed by the researchers takes into account the number of backers, the amount of funding raised, and the time remaining in the campaign to predict the outcome of a campaign. The algorithm also takes into account the class of backers that a campaign is likely to attract. The researchers found that the algorithm could predict the outcome of a campaign with an accuracy of 76%.
Campaign creators can use the findings of this study to tailor their campaigns to appeal to the right class of backers. For example, if a campaign is likely to attract low-risk backers, the creator can focus on promoting the quality of the product or service being offered rather than the popularity of the campaign. If a campaign is likely to attract mid-risk backers, the creator can focus on promoting the popularity of the campaign and the number of backers it has already attracted. If a campaign is likely to attract high-risk backers, the creator can focus on promoting the potential of the project and the unique features that make it stand out from other campaigns.
The study also found that the success of a campaign is influenced by the number of backers who pledge a high amount of money. These high-pledge backers are more likely to be influenced by the quality of the project and the potential return on investment than by the popularity of the campaign. Campaign creators can use this information to target high-pledge backers by offering them exclusive rewards or perks that are not available to other backers
In conclusion, the landscape of Kickstarter's success is nuanced. Contrary to popular belief, it's not just about going viral; it's about understanding and catering to specific classes of backers – the low-risk, mid-risk, and high-risk backers. Creators navigating the crowdfunding realm can leverage the study's findings to strategically tailor their campaigns.
