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Find the perfect match: The interplay among Facebook, YouTube and LinkedIn on crowdfunding success
Abstract
Since crowdfunding emerged as a new funding channel for entrepreneurial projects, researchers focused on investigating factors that actually lead to crowdfunding campaign’s success. Such tools for promotion of a campaign are, for example, social media. Like crowdfunding platforms they are also Web 2.0 applications, which changed our cultural norms and business praxes by creating the world where country borders became invisible and communication immediate. But how does the activity on social media affect the crowdfunder’s decision to pledge money for someone’s entrepreneurial endeavors? In this study, we take a look at the influence of electronic word of mouth (eWoM) via Facebook and YouTube, as well as the impact of social capital on the business oriented service LinkedIn, on the success of a crowdfunding campaign. We examine the interplay between these different platforms and propose social media strategies for entrepreneurs, which may increase their chances for being funded.
... For example, although studies on digital crowdfunding, crowdfunding, social capital, and signalling success factors in network environments do exist (Ahlers et al., 2015;Courtney et al., 2017;Kromidha and Robson, 2016), they are often based on developed country digital platforms and projects. Despite the fact that, in online social media such as Facebook, YouTube, or LinkedIn, electronic word of mouth plays an important role in crowdfunding success (Fietkiewicz et al., 2018), this level of connectivity cannot always be achieved in developing countries. Similarly, although, owing to the increase in demand, the forces of globalisation are believed to enhance the welfare of poor, marginalised individuals in developing countries, there is however the risk of these individuals not benefitting from this state of affairs due to a lack of knowledge or of the resources required to keep up with the dynamics of the commercial environment (Bhensdadia and Dana, 2004). ...
... There was no multi-collinearity issue in the dataset. The tolerance statistics needed to be above 0.2 and variance inflation factor (VIF) less than 10 (Field, 2009). For all the independent variables, the range of tolerance statistics was 0.340 to 0.970 and range for VIF was 1.003 to 2.939. ...
... They also find that clicks sourced from Facebook and Twitter contribute differently to the funding target, and that click-through activities originating from Facebook are more than twice as effective as those from Twitter. Although Fietkiewicz et al. (2018) note the significance of the interaction between Facebook, YouTube and LinkedIn on crowdfunding outcomes, surprisingly they do not find any relationship with Facebook when measured on its own. Other authors find that greater embeddedness of Twitter users can result in a disproportionate increase in crowdfunding results (Hong et al., 2015), and that the number of social media accounts of the project founder and the project itself are influential in respect of both number of funders and the funding total; however counterintuitively they also find that the social reach of these accounts is not significant (Clauss et al., 2020). ...
... Our study contributes to the literature on the relationship between crowdfunding and social networks (e.g. Byrnes et al., 2014;Clauss et al., 2020;Fietkiewicz et al., 2018;Hekman & Brussee, 2013;Hong et al., 2015) and social ties (e.g. Borst et al., 2018;Polzin et al., 2018;Simon et al., 2019;Zheng et al., 2018Zheng et al., , 2014 by offering a nuanced insight into how the online fan communication channels of CCI campaign founders represent their underlying social ties with their fans. ...
Over the past decade, the creative and cultural industries (CCI) have embraced Direct-to-Fan (D2F) crowdfunding as a new and innovative mechanism to finance their independent creative endeavours. We analyse a private dataset of crowdfunding campaigns, comprising ex-ante community metrics and rich qualitative measures to determine how the social ties embedded within multiple coexisting online creator-fan communication channels impact the conversion of fans into campaign funders. Using a combination of negative binomial and logistic regressions, we find evidence of a clear hierarchy of importance of online communication channels, with email representing the most effective medium, followed by Facebook, and Twitter the least important. This finding both supports the contention that stronger social ties better relied upon for financial support, and shines a light on the importance of email, an otherwise under-considered factor in crowdfunding performance. A quantile regression analysis further demonstrates that the importance of social ties maintained through email tends to be relatively greater among better-performing campaigns, while for poorly performing campaigns the importance of the length of written funding pitch is greater. We conclude by offering several thoughts on how CCI creators can manage their online fan networks to develop stronger social ties and thus maximise the results of future D2F activities.
... These new digital tools are slowly replacing the known, traditional means of communication [4]. They generate new ways of interaction not only between individuals, but also between firms and their clients [5]. However, not everyone applies the different SNSs in a same way. ...
... Poland F(P) Silver Gen X Gen Y Gen Z Facebook 6.00 (50%) 6.00 (89%) 6.00 (88%) 5 Regarding our South African sample almost all differences were significant on at least 5%-level. Most of the differences were negative, like for the other two countries. ...
... Zhou and Kuo (2018) investigate how non-profit organizations utilize crowdfunding platforms, an emerging form of social media, for advocacy activities. Fietkiewicz et al (2018) explore the impact of various social media platforms, including Facebook, YouTube, and LinkedIn, on crowdfunding success. Gera and Kaur (2018) investigate the factors influencing the success of crowdfunded campaigns and highlight the use of social media for crowdfunding. ...
... Many entrepreneurs benefit from social media (Bowen and Morris, 2019;Olanrewaju et al., 2020). Research shows that social media has changed how entrepreneurs carry out their activities in various areas, including marketing (e.g., Brink, 2017;Bulearca and Bulearca, 2010;Hensel and Deis, 2010;Jones et al., 2015;Michaelidou et al., 2011), business networking (Smith et al., 2017), information search (e.g., Fernandes et al., 2016;Kuhn et al., 2016;Quinton and Wilson, 2016), crowdfunding (e.g., Datta et al., 2019;Fietkiewicz et al., 2018;Roedenbeck and Lieb, 2018), stakeholder management (Morris and James, 2017), education (Cornelisse et al., 2011;Lekhanya, 2013), and sales (Dias and Franco, 2018). Additionally, more consumers are becoming engaged in the production of goods and services: The field of digital food activism has grown in recent years and has been emphasised as a novel form of consumer activism and food governance (Schneider et al., 2018). ...
This study critically explores the potential negative impacts of social media for entrepreneurship, and acknowledges online interactions as a part of the social dynamics surrounding entrepreneurship. The study departs from theories on entre-preneurship as a context-dependent social process and uses Granovetter's concept of ties as a theoretical lens. To develop an understanding of the social aspects of entrepreneurship, this study employs qualitative methods of inquiry and combines a netnographic approach with ethnography. This study illustrates the need to include interactions on social media platforms as a part of the social context for entrepreneurs, and introduces the concept of intrusive ties for explaining how individuals online can, forcibly, make themselves part of the entrepreneurial process.
... This study highlighted the motives that stimulate people towards extending money in donation-based crowdfunding from the point of view of individual funders (Zhang and Chen, 2018). The study also focused on the role of social structures and connections, including social media interactions (Fietkiewicz et al., 2018;Menon et al., 2018) in driving funders' action (Skirnevskiy et al., 2017). The study sheds light on individuals' collective efforts that highlight the role of crowd collectivism in influencing an individual's intrinsic motivation for backing projects. ...
Crowdfunding is an open call for financial resources from a group of people to fund a particular initiative with commercial and non-commercial motives. Crowdfunding in India is dominantly donation-based. The main objective of the study is to explore the reasons behind the dominance of donation-based crowdfunding in India and to explore the factors that motivate fund providers to participate in donation-based crowdfunding. The findings of the study reveal that the sense of pride and satisfaction, funders tendency to follow herd and trend, emotions and religious beliefs, fund providers choice of data privacy, lack of financial burden, and minuscule return promised in other forms of crowdfunding are factors responsible for the dominance of donation-based model of crowdfunding in India. The study also concludes that interest and association with the cause, project novelty and characteristics, shared thoughts and beliefs, prosocial motives, and personal networks motivate fund providers towards backing donation-based crowdfunding projects. Reference to this paper should be made as follows: Vijaya and Mathur, H.P. (2022) 'Factors governing domination and motivation behind donation-based crowdfunding in India', Int.
... Crowdfunding literally means 'financing from the masses'. This terminology is supported by the immense power that the masses can exercise in mobilising financial resources (Ali-Hassan and Allam, 2016;Beier and Wagner, 2017;Elkuch et al., 2013;Fietkiewicz et al., 2018;Freud, 1981;Le Bon, 1988;Menon et al., 2018;Nigam et al., 2019;Richter et al., 2015;Surowiecki, 2004;Turner and Killian, 1972;Wallace, 1999). This alternative, crowdfunding mechanism, which has boomed in Europe and North America, boosted by fundraising campaigns that have reached several million dollars on US platforms. ...
In this paper, we study the relationship between geographic distance, asymmetric information and the success of crowdfunding campaigns. For this purpose, we collect data from the 'Kickstarter' crowdfunding platform from 2012 to 2013. The sample contains 9,146 projects financed by more than 300,000 funders in 165 countries. An ordinary least squares (OLS) model was used. Results show a positive and significant relationship between information asymmetry items and the success of the crowdfunding campaign. This relationship is negative between the geographic distance of the funders and the campaign's success, meaning that the farther the funder is located from the project, the less is the probability of the campaign's success. Results also show that the number of funders, the duration of the project, and the economic sector are linked to crowdfunding campaign success.
... For example, although studies on digital crowdfunding, crowdfunding, social capital, and signalling success factors in network environments do exist (Ahlers, Cumming, Günther, & Schweizer, 2015;Courtney, Dutta, & Li, 2017;Kromidha & Robson, 2016), they are often based on developed country digital platforms and projects. Despite the fact that, in online social media such as Facebook, YouTube, or LinkedIn, electronic word of mouth plays an important role in crowdfunding success (Fietkiewicz, Hoffmann, & Lins, 2018), this level of connectivity cannot always be achieved in developing countries. Similarly, although, owing to the increase in demand, the forces of globalization are believed to enhance the welfare of poor, marginalized individuals in developing countries, there is however the risk of these individuals not benefitting from this state of affairs due to a lack of knowledge or of the resources required to keep up with the dynamics of the commercial environment (Bhensdadia & Dana, 2004). ...
This paper advances the knowledge on digital microfinance crowdfunding for women entrepreneurship and development by comparing environment and project factors in India. The empirical evidence is based on projects enacted by 626 poor and digitally disconnected women borrowers listed in Rang De, India’s first digital social enterprise platform for crowdfunding and microfinance. The findings show that, even when the borrowers are digitally and socially disconnected from their funders, success is more a result of environmental factors than of project-specific characteristics. This differs from what is suggested by developed country crowdfunding research in regard to the importance of proximity and direct links between borrowers and investors. The importance and gender-specific role played by intermediaries in relation to digitally disconnected borrowers is also acknowledged, driving more attention to gender equality and to the digital divide for access to finance.
... Crowdfunding literally means "financing from the masses." This terminology is supported by the immense power that the masses can exercise in mobilizing financial resources (Ali-Hassan & Allam, 2016;Beier and Wagner 2017;Elkuch et al., 2013;Fietkiewicz et al., 2018;Freud, 1981;Le Bon, 1988 ;Menon et al., 2018 ;Nigam et al., 2019Richter et al., 2015Russ, 2007;Surowiecki, 2004;Turner & Killian, 1972;Wallace, 1999). This alternative, crowdfunding mechanism, which has boomed in Europe and North America, boosted by fundraising campaigns that have reached several million dollars on American platforms (NEWSPAPERS, 2011). ...
In this paper, we study the relationship between geographic distance, asymmetric information and the success of crowdfunding campaigns. For this purpose, we collect data from the Kickstarter crowdfunding platform from 2012 to 2013. The sample contains 9,146 projects financed by more than 300,000 funders in 165 countries. An ordinary least squares (OLS) model was used. Results show a positive and significant relationship between information asymmetry items and the success of the crowdfunding campaign. This relationship is negative between the geographic distance of the funders and the campaigns success, meaning that the farther the funder is located from the project the less is the probability of the campaigns success. Results also show that the number of funders, the duration of the project, and the economic sector are linked to crowdfunding campaign success.
... Crowdfunding literally means "financing from the masses." This terminology is supported by the immense power that the masses can exercise in mobilizing financial resources (Ali-Hassan & Allam, 2016;Beier and Wagner 2017;Elkuch et al., 2013;Fietkiewicz et al., 2018;Freud, 1981;Le Bon, 1988 ;Menon et al., 2018 ;Nigam et al., 2019Richter et al., 2015Russ, 2007;Surowiecki, 2004;Turner & Killian, 1972;Wallace, 1999). This alternative, crowdfunding mechanism, which has boomed in Europe and North America, boosted by fundraising campaigns that have reached several million dollars on American platforms (NEWSPAPERS, 2011). ...
In this study, we examine whether access to venture capital for female entrepreneurs is more constrained than for their male counterparts, taking into account their educational background and innovativeness. We use an econometric approach to analyse gender differences in gaining access to external equity capital, based on data of 3,137 German new ventures founded between 2005 and 2009. Our results emphasise a gender gap with respect to external equity funding. We find that female entrepreneurs receive less venture capital than male entrepreneurs do. This effect is particularly strong in the case of entrepreneurs with university degrees and entrepreneurial projects with high research and development activity.
Purpose
– This study’s aim is to investigate the role of investor communication in equity-based crowdfunding. The study explores whether and how investor communication can reduce information asymmetries between investors and new ventures in equity-based crowdfunding, thereby facilitating the crowd’s investment decisions.
Design/methodology/approach
– This paper follows an exploratory qualitative research approach based on semi-structured interviews with 23 market participants in equity-based crowdfunding: 12 investors, 6 new ventures and 5 third parties (mostly platform operators). After analyzing, coding and categorizing the data, this paper developed a theoretical framework and presented it in a set of six propositions.
Findings
– The results indicate that the venture’s overall impression – especially perceived sympathy, openness and trustworthiness – is important to reduce perceived information asymmetries of investors in equity-based crowdfunding. To communicate these soft facts, personal communication seems to be replaced by pseudo-personal communication over the Internet (e.g. videos, investor relations channels and social media). In addition, the communications of third parties (e.g. other crowd investors, professional and experienced investors and other external stakeholders) influence the decision-making process of investors in equity-based crowdfunding. Third-party endorsements reduce the perceived information asymmetries and lower the importance of pseudo-personal communications by the venture.
Originality/value
– Prior research shows that investor communication reduces information asymmetries between companies and investors. Currently, little is known about the role of investor communication in equity-based crowdfunding. This study focuses on the role of investor communication to reduce the perceived information asymmetries of investors in equity-based crowdfunding.
The purpose of this study is to investigate the behavioural intention towards usage of social media channels. The research model and the hypothesis are constructed for this research which is evaluated by structural equation model (SEM). One of the primary theoretical foundations is the technology acceptance model (TAM). To build a more comprehensive model that presents the use of social media channels, this study also utilises other customer characteristics including accessibility, language, and trust of social media channels, along with the constructs in TAM. The results reveal that the total effect of the factors that influence the behavioural intention of customers to use social media channels is ranked as follows: perceived enjoyment (PE); accessibility (AC); perceived usefulness (PU); trust of social media channels (TSMC); perceived ease of use (PEU); attitude (A); social influence (SI); self-efficacy (SE). To investigate the hypotheses and research questions, a survey method using a convenience sample was employed. As populations of interest were all individuals in Former Yugoslav Republic of Macedonia (FYROM) who use social media. The questionnaire was self-administered which was administered electronically using internet (docs.google.com). Total number of responses we got is 384, however only 289 (75.26%) were considered for this study, since 95 (24.74%) questionnaires were answered incorrectly.
The purpose of this paper is to analyse the social media marketing practices of SMEs. Social networks are profoundly transforming the way customers use the web and thus challenging SME business practices. Although the social media provide affordable channels for marketing and are thus appropriate tools for firms with limited resources, some SMEs and entrepreneurs still question their credibility and sustainability. Based on seven semi-structured interviews with web marketing consultants, an online survey with 104 owner-managers of tourism SMEs, and a netnographic study, this research analyses the place of social media in SMEs. It describes their practices, shows that SMEs underuse these tools, and proposes some managerial recommendations to small business owner-managers.
We examine the conceptual difference between consumer electronic word-of-mouth on online social sites (sWOM) such as Facebook and traditional face-to-face word-of-mouth (WOM). We find that consumers are less willing to engage in sWOM than WOM. Such a difference in willingness to offer word-of-mouth can be explained by social risk associated with different communication modes. We show that the difference between people’s desire to engage in sWOM versus WOM is mediated by perceived social risk and amplified when social risk is made salient. Furthermore, we show that consumers’ need to self-enhance mitigates the difference in willingness to offer sWOM versus WOM.
Crowdfunding -- in which people can raise funds through collaborative contributions of general public (i.e., crowd) -- has emerged as a billion dollars business for supporting more than one million ventures. However, very few research works have examined the process of crowdfunding. In particular, none has studied how social networks help crowdfunding projects to succeed. To gain insights into the effects of social networks in crowdfunding, we analyze the hidden connections between the fundraising results of projects on crowdfunding websites and the corresponding promotion campaigns in social media. Our analysis considers the dynamics of crowdfunding from two aspects: how fundraising activities and promotional activities on social media simultaneously evolve over time, and how the promotion campaigns influence the final outcomes. From our investigation, we identify a number of important principles that provide a useful guide for devising effective campaigns. For example, we observe temporal distribution of customer interest, strong correlations between a crowdfunding project's early promotional activities and the final outcomes, and the importance of concurrent promotion from multiple sources. We then show that these discoveries can help predict several important quantities, including overall popularity and the success rate of the project. Finally, we show how to use these discoveries to help design crowdfunding sites.
This publication contains reprint articles for which IEEE does not hold copyright. Full text is not available on IEEE Xplore for these articles.
Crowdfunding allows founders of for-profit, artistic, and cultural ventures to fund their efforts by drawing on relatively small contributions from a relatively large number of individuals using the internet, without standard financial intermediaries. Drawing on a dataset of over 48,500 projects with combined funding over $237 M, this paper offers a description of the underlying dynamics of success and failure among crowdfunded ventures. It suggests that personal networks and underlying project quality are associated with the success of crowdfunding efforts, and that geography is related to both the type of projects proposed and successful fundraising. Finally, I find that the vast majority of founders seem to fulfill their obligations to funders, but that over 75% deliver products later than expected, with the degree of delay predicted by the level and amount of funding a project receives. These results offer insight into the emerging phenomenon of crowdfunding, and also shed light more generally on the ways that the actions of founders may affect their ability to receive entrepreneurial financing.
This study tests hypotheses regarding differences in brand-related user-generated content (UGC) between Twitter (a microblogging site), Facebook (a social network) and YouTube (a content community). It tests them using data from a content analysis of 600 UGC posts for two retail-apparel brands (Lululemon and American Apparel), which differ in the extent to which they manage social media proactively. Comparisons are drawn across six dimensions of UGC; the dimensions were drawn from a priori reading and an inductive analysis of brand-related UGC. This research provides a general framework for comparing brand-related UGC, and helps us to better understand how particular social media channels and marketing strategies may influence consumer-produced brand communications.
Despite a certified need for stronger ties between regional entrepreneurial ecosystems and larger networks, and despite an emerging discourse on beneficial interlinks between crowdsourcing and urban development, the relationship between crowdsourcing and regional development is underexplored. Unlike the few existing reports on voluntary bottom-up crowdsourcing initiatives for regional development, the focus of the present article is on two cases of top-down initiatives of crowdsourcing for regional development launched by institutional actors in the Swiss Canton of Valais and the Italian autonomous province, South Tyrol. The results of a comparison of the two cases suggest consideration of the strength of regional ties as factors that undermine crowd wisdom and flow as well as exercising caution with quantitative idea selection processes, at least in the context of smaller regional crowdsourcing projects.
Purpose
– Business and academia alike have become aware of the crucial role of customer‐to‐customer interactions. Facilitated by the increasing customer connectedness through online media possibilities, companies need to understand how customers influence each other and how to manage these customer interactions. The purpose of this paper is to conceptualize an expanded model of customer‐driven influence (CDI) that presents an overview of the influence process and its determinants. The model covers important issues, such as deliberate versus unintentional sender actions, verbal and non‐verbal communication, and reflective and impulsive receiver reactions.
Design/methodology/approach
– This article is the result of the first Thought Leadership Conference on Service Marketing, held in Nijmegen, The Netherlands, June 2012.
Findings
– The model shows the importance of considering goal theory in studying customer‐driven influence. Both sender and receiver can act and react in deliberate and unintentional ways. The mechanisms for customer‐driven influence are then contingent upon which particular goal (combination) is activated. Message reception is either verbal or non‐verbal. Furthermore, the receiver can react either by reflective processing or by impulsive processing leading to liking a particular product or wanting the product (respectively). Accordingly, the receiver builds behavioral intentions of purchasing and further talking about the particular product.
Originality/value
– This paper synthesizes insights from the extant literature on word‐of‐mouth, social influence, and dual processing of information to develop a comprehensive model customer‐driven influence. The authors' framework is embedded in goal system theory, as it addresses fundamental self‐regulatory issues, such as the impact of implicit goal activation and essential contextual factors on preference formation and choice.
Initial sociological interest in network forms of organization was motivated in part by a critique of economic views of organization. Sociologists sought to highlight the prevalence and functionality of organizational forms that could not be classified as markets or hierarchies. As a result of this work, we now know that network forms of organization foster learning, represent a mechanism for the attainment of status or legitimacy, provide a variety of economic benefits, facilitate the management of resource dependencies, and provide considerable autonomy for employees. However, as sociologists move away from critiquing what are now somewhat outdated economic views, they need to balance the exclusive focus on prevalence and function-ality with attention to constraint and dysfunctionality. The authors review work that has laid a foundation for this broader focus and suggest analytical concerns that should guide this literature as it moves forward.
Caucasian societies suffer from a tremendous brain drain to so-called more advanced societies. Against this background, the paper discusses crowdsourcing, a recent trend in open innovation, as a means of reducing or even inverting the brain drain of Caucasian societies.
Through Web-based consumer opinion platforms (e.g., epinions.com), the Internet enables customers to share their opinions on, and experiences with, goods and services with a multitude of other consumers; that is, to engage in electronic word-of-mouth (eWOM) communication. Drawing on findings from research on virtual communities and traditional word-of-mouth literature, a typology for motives of consumer online articulation is developed. Using an online sample of some 2,000 consumers, information on the structure and relevance of the motives of consumers' online articulations is generated. The resulting analysis suggests that consumers' desire for social interaction, desire for economic incentives, their concern for other consumers, and the potential to enhance their own self-worth are the primary factors leading to eWOM behavior. Further, eWOM providers can be grouped based on what motivates their behavior, suggesting that firms may need to develop different strategies for encouraging eWOM behavior among their users.
This paper answers the question, "Why do organizations process information?" Uncertainty and equivocality are defined as two forces that influence information processing in organizations. Organization structure and internal systems determine both the amount and richness of information provided to managers. Models are proposed that show how organizations can be designed to meet the information needs of technology, interdepartmental relations, and the environment. One implication for managers is that a major problem is lack of clarity, not lack of data. The models indicate how organizations can be designed to provide information mechanisms to both reduce uncertainty and resolve equivocality.
Traditionally, consumers used the Internet to simply expend content: they read it, they watched it, and they used it to buy products and services. Increasingly, however, consumers are utilizing platforms--such as content sharing sites, blogs, social networking, and wikis--to create, modify, share, and discuss Internet content. This represents the social media phenomenon, which can now significantly impact a firm's reputation, sales, and even survival. Yet, many executives eschew or ignore this form of media because they don't understand what it is, the various forms it can take, and how to engage with it and learn. In response, we present a framework that defines social media by using seven functional building blocks: identity, conversations, sharing, presence, relationships, reputation, and groups. As different social media activities are defined by the extent to which they focus on some or all of these blocks, we explain the implications that each block can have for how firms should engage with social media. To conclude, we present a number of recommendations regarding how firms should develop strategies for monitoring, understanding, and responding to different social media activities.
International entrepreneurship (IE) research has commonly neglected significant perspectives applied by international business scholars. Explanations for the emergence and growth of international entrepreneurial firms largely focus on the resource-based view and the network perspective. While these approaches are useful, we suggest that IE would benefit significantly from a greater emphasis on its international nature. Therefore, theories of international business should be employed in conjunction with other approaches in order to appropriately emphasize the international character, holistically study the IE notion, and considerably broaden the scope of IE examination. Suggestions for relevant research directions are discussed.
The concept of Social Media is top of the agenda for many business executives today. Decision makers, as well as consultants, try to identify ways in which firms can make profitable use of applications such as Wikipedia, YouTube, Facebook, Second Life, and Twitter. Yet despite this interest, there seems to be very limited understanding of what the term “Social Media” exactly means; this article intends to provide some clarification. We begin by describing the concept of Social Media, and discuss how it differs from related concepts such as Web 2.0 and User Generated Content. Based on this definition, we then provide a classification of Social Media which groups applications currently subsumed under the generalized term into more specific categories by characteristic: collaborative projects, blogs, content communities, social networking sites, virtual game worlds, and virtual social worlds. Finally, we present 10 pieces of advice for companies which decide to utilize Social Media.
Applying Technology Acceptance Model (TAM) and Elaboration Likelihood Model (ELM), we investigated the effects of content type (utilitarian vs. hedonic) on individuals' involvement and intention to subscribe/promote a company's SNS. An experiment was conducted with 171 participants. We found that utilitarian content worked better for highly involved individuals than hedonic content, but hedonic content increased individuals' situational involvement with a company's SNS more than utilitarian content among low-involved people. Both situational and enduring involvements influenced intention to subscribe to and continuously promote the company's SNS. Theoretical and practical implications are discussed further.
Crowdfunding allows entrepreneurs to fund their business projects by attracting crowd investors to provide relatively small financial amounts via a standardized internet-based platform. Research on this topic is still limited, especially considering determinants that actually " convince the crowd " to fund someone else's business idea. This study examines impression management strategies as drivers for crowdfunding success. Based on a sample of 264 crowdfunding campaigns from Kickstarter, we develop and test hypotheses concerning linguistic behaviors affecting the likelihood of raising funds and the number of project backers. We find that crowd investors prefer high levels of positive language patterns and moderate levels of promoting innovativeness.
The period since 1980 has seen the emergence of venture capital as an area of academic interest and research activity. This interest is merited given the importance of venture capital to economic development and new venture creation. This paper surveys venture capital research since 1981. Based upon that research, a descriptive model of the venture capital process is proposed. The model is then used to develop suggestions for future research topics. Suggestions for improving research methodology are also included.
Die Nutzung von Facebook-Fanpages als Marketinginstrument gewinnt in der Unternehmenspraxis zunehmend an Relevanz. Unabhängig von der Branche oder der Unternehmensgröße investieren Marketers vermehrt in eine eigene Präsenz im größten sozialen Netzwerk, um kostengünstig mit (potenziellen) Kunden zu kommunizieren. Weitestgehend unerforscht sind jedoch die Wirkungsmechanismen dieser Aktivitäten. Die vorliegende Studie stellt einen Ansatz zur Schließung dieser managernentrelevanten Forschungslücke dar. Erkenntnisse der Werbewirkungsforschung werden auf das Medium Facebook übertragen und anhand einer Stichprobe von 369 Beiträgen deutschsprachiger Automobilhersteller-Fanpages empirisch überprüft. Es zeigt sich, dass die Fan-Reaktionen von der Größe der Beiträge, der Textdichte und den medialen Inhalten abhängig sind. Zudem erhalten Beiträge mit Aufforderungen und Fragen überdurchschnittlich starke Reaktionen.
Several organizations have developed ongoing crowdsourcing communities that repeatedly collect ideas for new products and services from a large, dispersed "crowd" of nonexperts (consumers) over time. Despite its promises, little is known about the nature of an individual's ideation efforts in such an online community. Studying Dell's IdeaStorm community, serial ideators are found to be more likely than consumers with only one idea to generate an idea the organization finds valuable enough to implement, but they are unlikely to repeat their early success once their ideas are implemented. As ideators with past success attempt to again come up with ideas that will excite the organization, they instead end up proposing ideas similar to their ideas that were already implemented (i.e., they generate less diverse ideas). The negative effects of past success are somewhat mitigated for ideators with diverse commenting activity on others' ideas. These findings highlight some of the challenges in maintaining an ongoing supply of quality ideas from the crowd over time.
We use signalling theory to study a new capital market finance phenomenon: crowdfunding in China. Our finding indicates that signals such as the frequency of announcements and the amount of the highest bid have an impact on the success of crowdfunding projects. Based on a sample of 192 projects collected on a Chinese crowdfunding platform, demohour.com, we find that the amount of the highest bid has a positive effect on completing a successful crowdfunding project. However, for high-tech industry, our results indicate the amount of the highest bid is not as effective as the movie/music industries. We also find the frequency of announcements made by the project founders is a better predictor for funding success in the high-tech industry than in the movie/music industries.
Rewards-based crowdfunding campaigns are commonly offered in one of two models: “Keep-it-All” (KIA) where the entrepreneurial firm sets a fundraising goal and keeps the entire amount raised regardless of whether or not they meet their goal, and “All-or-Nothing” (AON) where the entrepreneurial firm sets a fundraising goal and keeps nothing unless the goal is achieved. We provide large sample evidence consistent with the view that the usage of AON is a credible signal to the crowd that the entrepreneur commits not to undertake the project if not enough is raised. This signal reduces the risk to the crowd, thereby enabling the AON entrepreneurial firms to set higher goals, raise more money, and be more likely to reach their stated goals. In contrast, KIA projects tend to be less successful, since the crowd bears the risk that an entrepreneurial firm undertakes a project that is underfunded and hence more likely to fail after the campaign. Entrepreneurs use the KIA model for scalable projects; that is, projects that are still feasible with partial funding. Further, we provide evidence that the crowd is much more sensitive to information provided by AON projects. We show that these findings are robust to a number of robustness checks, including but not limited to use of instrumental variables and propensity score matching.
Crowdfunding, a novel form of financing, has seen massive growth over the last few years. Under crowdfunding, a firm asks for a large number of small loans from many households. But if some predefined threshold for the aggregate loan volume is missed, the firm cannot draw the loans. We construct a model to argue that this mechanism can be used to aggregate vague information by many households (for example, potential future consumers of the firm's products). Each household can spend an effort to obtain a bit of vague information -- too vague to justify a straight loan. But if the firm sets a high threshold, a household knows that its money will only be drawn if many other households also get positive information. We describe the equilibrium behavior of households and firms. With crowdfunding, from a welfare perspective, firms set both the loan rate and the threshold too low, inducing households to generate too much information. But compared with standard debt, crowdfunding enables more good projects to receive funding.
Social media networks (e.g., Facebook) have become a major factor influencing various aspects of consumer behaviour and have thus also become the targets of marketers. Social networks that gather special interest groups, such as celebrity fan groups, provide a particularly attractive point of leverage for community marketing. However, there remain open questions regarding the success of community marketing activities in social media. The present study attempts to close this gap by investigating whether: 1) the image of the brand and 2) the celebrity endorser credibility of a top sports team influence the perceived customer value of the sponsoring firm. Based on a survey of members of a Facebook fan group of an Austrian celebrity sports team (n = 322), we identify a direct positive impact of celebrity-centred community marketing in social media on customer value. Our findings emphasise the relevance of coordinated marketing activities that use social media to create customer value.
The nascent crowdfunding literature has highlighted the existence of a self-reinforcing pattern whereby contributions received in the early days of a campaign accelerate its success. After discussing what sustains this pattern, we maintain that the internal social capital that proponents may develop inside the crowdfunding community provides crucial assistance in igniting a self-reinforcing mechanism. Results of an econometric analysis of a sample of 669 Kickstarter projects are consistent with this view. Moreover, the effect of internal social capital on the success of a campaign is fully mediated by the capital and backers collected in the campaign's early days.
Electronic word-of mouth (eWOM) has attracted considerable interest from researchers in the past decade. Although the extant research has helped us to develop a good understanding of a number of the issues pertaining to eWOM, several research and managerial questions remain. Furthermore, no attempt has been made to consolidate and synthesize this stream of research. With consumers' increasing reliance on online retailing and information seeking, as well as the continued growth of social media, the importance of eWOM cannot be overstated. Based on a systematic review of 190 studies, we conduct a multi-dimensional analysis of eWOM communication. We present the key issues in current and emerging literature and propose important questions for future research.
In recent years, daily-deal sites that help sellers offer deep-discounted vouchers have become an increasingly popular marketing vehicle. To investigate their effectiveness on sales, this study hypothesizes two different mechanisms, i.e., observational learning and Word-of-Mouth (WOM) via online social networks, affect shopping behaviors and sales of daily-deal vouchers. Using a unique panel data set consisting of accurate sales data of more than 500 deals from Groupon.com, this study empirically tests saliency of the two mechanisms. The findings indicate that while both mechanisms have a significantly positive association with voucher sales, the effect is stronger for Facebook-mediated WOM than for observational learning. We find that one Facebook Like on a deal, on average, is associated with two additional voucher sales and thus an increase of $215 in revenue. However, we do not find consistent evidence that Twitter-mediated WOM has any impact on the voucher sales.
Most research on consumer choice assumes that decisions are usually made by individuals, and that these decisions are based on an individual's personal attitudes, beliefs, and preferences. Yet, much consumer behavior—from joint decisions to individual choices—is directly or indirectly shaped by people with whom we have some relationship. In this target article, we examine how each member in a relationship can affect how consumer decisions are made. After reviewing foundational work in the area, we introduce a powerful and statistically sophisticated methodology to study decisions within relationships—a dyadic framework of decision-making. We then discuss how the study of consumer decisions in relationships can be informed by different theories in the relationships field, including attachment, interdependence, social power, communal/exchange orientations, relationship norms, and evolutionary principles. By building on the seminal foundations of prior joint-decision making research with theories and methods from contemporary relationship science, we hope to facilitate the integration of the consumer and relationships literature to better understand and generate novel hypotheses about consumer decisions in relationships.
This paper examines the role of reputable investors in a crowdfunding market. Using a novel data set on individual investments in a crowdfunding market for mobile applications, we investigate whether early investments serve as signals of quality for later investors, and if the value of these signals differs depending on the identity of early investors. We find that reputable investors — app developer investors and experienced investors — tend to invest early. We also find that while both types of experts are likely to influence later investors, the specifics of their expertise determine their influence. App developer investors tend to have a better knowledge of the product and are found to be more influential for “concept apps” (apps in the pre-release stage), whereas experienced investors — investors with a better knowledge of market performance are found to be more influential for “live apps” (apps that are already being sold in the market). Our findings show that the majority of investors in this market — the crowd — although inexperienced, are rather sophisticated in their ability to identify and exploit nuanced differences between various signals within the same market. In examining the ex-post performance of apps, we find that successful funding in the market is positively associated with ex-post app sales, providing some indication of rational herding among investors. Our study offers new insights for theories of opinion leadership and signaling, and also has practical implications for the design of crowdfunding markets.
Purpose – Crowdfunding implies mobilizing the crowd to finance projects which are posted on dedicated websites, known as crowdfunding platforms. Funding is provided by web users in exchange for some claims on the project revenues, or for a reward, or simply for donation. In this paper, we aim at learning more on what determines the probability of a project to reach the target funding. We apply the lens of social capital, defined by the goodwill available to her/him from the structure and content of his/her social relations (Adler and Kwon 2002). In particular we distinguish between ‘individual’ (exclusive) and ‘territorial’ (locally shared) social capital. Design/methodology/approach – We test our hypotheses by running Probit estimates on a sample of 461 crowdfunding projects posted by 699 proponents and hosted on 11 Italian crowdfunding platforms. The focal dependent variables deal with the individual social capital and geographically localized social capital. The former is proxied by the number of contacts of proponents on digital social networks (i.e. Facebook). To account for the latter, we refer to the municipality of residence of each proponent and resort to the traditional measure of localized social capital used in the literature. We control also for a set of project-specific variables. Originality/value –This methodology puts in evidence that in a framework with information asymmetry individual social capital (ISC) is positively and significantly correlated with the probability of success of a crowdfunding project, providing a positive signal to crowdfunders. On the contrary, we do not find any significant correlation with the diffused territorial social capital (TSC). By jointly considering the impact of ISC and TSC, we find that TSC weakens the signal provided by ISC. We posit that such result is a consequence of an ‘adverse-selection’ problem. Good-quality projects may more easily collect money on a territorial basis if TSC is large. Therefore crowdfunding projects originated in large-TSC milieus ceteris paribus are less easily financed by crowdfunders. Practical implications – Our work has interesting managerial implications. Individual social capital impacts on the success of crowdfunding projects and interacts with geolocalized territorial social capital. Accordingly, proponents, funders and managers of crowdfunding platforms who are interested in selecting potentially successful projects must consider such interaction, and carefully evaluate both individual and territorial social capital.
Entrepreneurs are turning to crowdfunding as a way to finance their creative ideas. Crowdfunding involves relatively small contributions of many consumer-investors over a fixed time limit (generally a few weeks). In online crowdfunding communities, potential donors can see the level of support from other project backers as well as its timing before making their own funding decisions, suggesting that social information (i.e., others’ funding decisions) will play an important role in the ultimate success of a project. Two years of publicly available panel data on successfully and unsuccessfully funded projects listed on Kickstarter is used to empirically study the role of social information in the dynamic behavior of project backers. Building off the well-established social psychology theory around diffusion of responsibility effects, we show that additional backer support is negatively related to its past backer support. Many potential backers do not contribute to a project that has already received a lot of support because they assume that others will provide the necessary funding. Consistent with the deadline effect widely observed in bargaining and online auctions, we also show that the diffusion of responsibility effects diminish as the project funding cycle approaches its closing date. Moreover, as the project deadline draws near we find that project updates tend to increase as the project creators make a final plea for help to reach their funding goal. Reduced diffusion of responsibility effects, together with the positive influence of project updates, lead to generally increasing project support in the final stages of funding. This is particularly the case for projects that successfully achieve their goals as they are more likely to have an update in the last weeks of funding and generate more excitement from recent backers than projects that fall short.
This study provided a comparative analysis of three social network sites, the open-to-all Facebook, the professionally oriented LinkedIn and the exclusive, members-only ASmallWorld.The analysis focused on the underlying structure or architecture of these sites, on the premise that it may set the tone for particular types of interaction.Through this comparative examination, four themes emerged, highlighting the private/public balance present in each social networking site, styles of self-presentation in spaces privately public and publicly private, cultivation of taste performances as a mode of sociocultural identification and organization and the formation of tight or loose social settings. Facebook emerged as the architectural equivalent of a glasshouse, with a publicly open structure, looser behavioral norms and an abundance of tools that members use to leave cues for each other. LinkedIn and ASmallWorld produced tighter spaces, which were consistent with the taste ethos of each network and offered less room for spontaneous interaction and network generation.
Previous studies of advocacy groups’ Web sites suggest that the use of dialogic strategies could lead to greater dialogic communication. This study examined whether dialogic strategies utilized by environmental advocacy groups via their social networking profiles lead to greater dialogic engagement between organizations and visitors. This study offers the first examination of the relationship between the creation of an online space for dialogue and actual dialogic engagement by identifying and measuring six dialogic outcomes.
Online reputation mechanisms harness the bi-directional communication capabilities of the Internet in order to engineer large-scale word-of-mouth networks. They are emerging as a promising alternative to more established assurance mechanisms, such as branding and formal contracting, in a variety of settings ranging from online marketplaces to Internet search engines. At the same time, they are transforming a concept that had traditionally fallen within the realm of the social sciences into an engineering design problem. This paper surveys our progress in understanding the new possibilities and challenges that these mechanisms represent. It discusses some important dimensions in which Internet-based reputation mechanisms differ from traditional word-of-mouth networks and surveys the most important issues related to designing, evaluating and using them. It provides an overview of relevant work in game theory and economics on the topic or reputation. It further discusses how this body of work is being extended and combined with insights from computer science, information systems, management science and psychology in order to take into consideration the special properties of online mechanisms such as their unprecedented scalability, the ability to precisely design the type of feedback information they solicit and distribute, and challenges associated with the volatility of identities and the absence of many familiar contextual cues in online environments.
The 21st century has brought both opportunities and challenges in our global, boundaryless world. Importantly, managers face a dynamic and interconnected international environment. As such, 21st century managers need to consider the many opportunities and threats that Web 2.0, social media, and creative consumers present and the resulting respective shifts in loci of activity, power, and value. To help managers understand this new dispensation, we propose five axioms: (1) social media are always a function of the technology, culture, and government of a particular country or context; (2) local events rarely remain local; (3) global events are likely to be (re)interpreted locally; (4) creative consumers’ actions and creations are also dependent on technology, culture, and government; and (5) technology is historically dependent. At the heart of these axioms is the managerial recommendation to continually stay up to date on technology, customers, and social media. To implement this managerial recommendation, marketers must truly engage customers, embrace technology, limit the power of bureaucracy, train and invest in their employees, and inform senior management about the opportunities of social media.
b>Purpose – The aim of this paper is to understand the behavior that Australian youths have towards wireless application protocol (WAP) banking.
Design/methodology/approach – This paper is based on a quantitative study of the youth market in Australia. Social cognitive theory is utilized to support a conceptual model that is empirically tested.
Findings – The major finding from the research is that the conceptual model is partially supported which indicates the immaturity of WAP technology.
Originality/value – Social cognitive theory provides a useful explanation for youth’s intentions to use WAP technology in the banking industry. The youth market is an early adopter of technology that presents a good indicator of future market potential.<br /
Purpose
The purpose of this paper is to analyze the emerging crowd‐funding phenomenon, that is a collective effort by consumers who network and pool their money together, usually via the internet, in order to invest in and support efforts initiated by other people or organizations. Successful service businesses that organize crowd‐funding and act as intermediaries are emerging, attesting to the viability of this means of attracting investment.
Design/methodology/approach
The research employs a “grounded theory” approach, performing an in‐depth qualitative analysis of three cases involving crowd‐funding initiatives: SellaBand in the music business, Trampoline in financial services, and Kapipal in non‐profit services. These cases were selected to represent a diverse set of crowd‐funding operations that vary in terms of risk/return for the investor and the type of payoff associated to the investment.
Findings
The research addresses two research questions: how and why do consumers turn into crowd‐funding participants? and how and why do service providers set up a crowd‐funding initiative? Concerning the first research question, the authors' findings reveal purposes, characteristics, roles and tasks, and investment size of crowd‐funding activity from the consumer's point of view. Regarding the second research question, the authors' analysis reveals purposes, service roles, and network effects of crowd‐funding activity investigated from the point of view of the service organization that set up the initiative.
Practical implications
The findings also have implications for service managers interested in launching and/or managing crowd‐funding initiatives.
Originality/value
The paper addresses an emerging phenomenon and contributes to service theory in terms of extending the consumer's role from co‐production and co‐creation to investment.
Consumers are adopting increasingly active roles in co-creating marketing content with companies and their respective brands. In turn, companies and organizations are looking to online social marketing programs and campaigns in an effort to reach consumers where they ‘live’ online. However, the challenge facing many companies is that although they recognize the need to be active in social media, they do not truly understand how to do it effectively, what performance indicators they should be measuring, and how they should measure them. Further, as companies develop social media strategies, platforms such as YouTube, Facebook, and Twitter are too often treated as stand-alone elements rather than part of an integrated system. This article offers a systematic way of understanding and conceptualizing online social media, as an ecosystem of related elements involving both digital and traditional media. We highlight a best-practice case study of an organization's successful efforts to leverage social media in reaching an important audience of young consumers. Then, we conclude with several insights and lessons related to the strategic integration of social media into a firm's marketing communications strategy.
This paper uses actual WOM information to examine the dynamic patterns of WOM and how it helps explain box office revenue. The WOM data was collected from the website of Yahoo! Movies. The results show that WOM activities are the most active during pre-release and the opening week, and that movie audiences tend to hold relatively high expectation before release, but become more critical in the opening week. More importantly, WOM information offers significant explanatory power for both aggregate and weekly box office revenue, especially in the early weeks after opening. However, most of this explanatory power comes from the volume of WOM, not its valence as measured by the percentages of positive and negative messages.
Much research suggests that social networks shape the emergence and development of nascent ventures. Scholars have argued that founders' and firms' networks influence innovation and the identification of entrepreneurial opportunities, as well as facilitate the mobilization of resources for growth and the harvesting of value from fledgling firms. It is not an exaggeration to claim that existing empirical findings point to the centrality of networks in every aspect of the entrepreneurial process. However, with exceptions so few they may be counted on one hand, this research untenably treats network structures as exogenous—in other words, as if entrepreneurs and enterprises do not pursue valuable connections. In this article, we review the literature on networks in entrepreneurial contexts, argue that it disproportionately focuses on the consequences of networks at the expense of research on their origins, and consider the implications for the literature of the fact that most entrepreneurs and young ventures are strategic in their formation of relations. We then articulate a research agenda composed of five areas of inquiry we consider critical to a better understanding of networks and entrepreneurship. Copyright © 2008 Strategic Management Society.
The internationalization of entrepreneurship is becoming increasingly facilitated through the use of the internet. This article
introduces the term “internetization” to refer to the process of increasing adoption, diffusion, and deployment of internet-based
technologies and processes that increasingly serve as the back bone of internationalization, especially in the innovative
entrepreneurial firms. This process may be compared to the firm’s adoption and use of the internet and the internet-based
processes in transforming the firm to a hybrid network internally and externally within the firm’s home and international
markets, especially when the members of its external network have already internationalized. Internationalization of the firm,
which has been much studied in the international business literature may provide a parallel analogy for study of internetization.
Based on these analogies and within the context of previous literature in internationalization, a brief examination of a typical
rapidly-internationalizing firm through the use of the Internet, and the user-generated provisions of Web 2.0 in particular,
points to the impact of internetization on internationalization. Various theoretical and research issues are highlighted and
discussed, including the important interactions that exist between the processes of internetization and internationalization.
Conclusion suggests that internetization may have become the necessary condition for internationalization. The paper calls
upon the IE scholars to respond to the theoretical challenge of integrating internetization processes into internationalization,
especially for the smaller, entrepreneurial and innovative firms.
KeywordsNew Economy-The Internet and Web 2.0-Entrepreneurship-Internationalization
This research seeks to predict the performance of new ventures based on factors that can be observed at the time of start-up. Indicators of initial human and financial capital are considered to determine how they bear upon the probability of three possible performance outcomes: (1) failure, (2) marginal survival, or (3) high growth.Four categories of initial human and financial capital are examined. General human capital, represented here by the entrepreneur's education, gender, and race, may reflect the extent to which the entrepreneur has had the opportunity to develop relevant skills and contacts. Management know-how, embodied in the entrepreneur or available through advisors or partners, reflects management-specific skills and knowledge, without regard to the kind of business. Industry-specific know-how reflects specific experience in similar businesses. Financial capital is one of the most visible resources; it can create a buffer against random shocks and allow the pursuit of more capital-intensive strategies, which are better protected from imitation.The study utilizes a longitudinal study of 1053 new ventures, representative of all industry sectors and geographical regions. The research departs from most previous studies in considering different measures of performance (marginal survival and growth) and in considering explicitly whether the factors contributing to marginal survival differ from those contributing to high growth.It was found that measures of general human capital influenced both survival and growth (except for gender, with women-owned ventures being less likely to grow, but just as likely to survive). Management know-how variables had more limited impact. Having parents who had owned a business contributed to marginal survival, but not to growth. Number of partners contributed to growth but not to survival. Management level, prior employment in non-profit organizations or not having been in the labor force, and the use of professional advisors did not have significant effects. Industry-specific know-how contributed to both survival and growth. Amount of initial financial capital also contributed to both.The usefulness of the model is enhanced by the fact that the resource variables considered are relatively easy to assess and all can be considered at the time of start-up. Although some of the human capital variables cannot easily be changed, the benefits or risks associated with each can be assessed. In some cases, potential problems can be identified so that plans can be modified to improve prospects. Overall it appears that, using a model based upon the initial human and financial capital of the venture, it is possible to predict the performance of new ventures with some degree of confidence.