Research Project Source – Tapping the Crowd

***As part of this course, I will be completing a research project on the topic of the value of crowdsourcing (crowd funding, crowd creation, crowd wisdom) for non-profit organizations.  The next couple of posts are analyses of possible sources for the project.***

Article Title: Crowdfunding: Tapping the Right Crowd

Credibility
This source is a discussion paper; a paper designed to present a question and research with the purpose of generating conversation.  A keyword search using OhioLink generated this source.

I believe this paper to be credible as like my previous source this a peer reviewed article.  The footnotes further describe that a a variety of seminar and conference participants reviewed the material. The research is supported by sources from other professional journal articles, books, discussion/working papers.

Summary
This paper offers a deep analysis of crowd funding by developing a model that associates crowd funding with pre-ordering and price discrimination.  It also studies the conditions under which crowd funding is preferred to traditional funding (bank loans), the long tail theory as it applies to crowd funding where more people contribute less, and it briefly explains the legal limitations of private equity investment in crowd funding.

Key Findings
Crowd funding requires community building. Trust building is an essential part of a crowd funding project.  This paper highlights the need to build community that benefits from private participation in initiative.

Financial return appear to be a secondary concern to those who provide funds. This suggests that crowd funders are more concerned with social reputation or simply enjoy contributing to a project’s success.

But….

Community members want rewards. Crowdfunders must feel that they are part of a community of priveledged consumers.  Crowdfunding rewards are often provided in the form of special access to content or management through voting rights.  This potentially provides entrepreneurs with even more opportunity to gather information on consumers needs/desires:

What kind of consumer/crowd funder insight can entrepreneurs gain through member voting?

Financial needs. Crowd funding works best when a project requests small amounts from many people. When a greater amount of money is needed upfront in order to complete a project, traditional loans may be a better fit.

Relevancy to research project

Though this paper emphasizes the entrepreneurial side of crowdfunding, I believe it  is relevant to my research because it provides an even more in-depth definition and context around crowd funding.

As part of the conclusion, the authors make recommendations for future research on crowd funding such as: How does crowdsourcing affect the flow of information between the organization and its customers?

Source:
Belleflamme, Paul, Lambert, Thomas and Schwienbacher, Armin, Crowdfunding: Tapping the Right Crowd (March 24, 2010). CORE Discussion Paper No. 2011/32.

Available at SSRN: http://ssrn.com.proxy.lib.muohio.edu/abstract=1578175 or http://dx.doi.org.proxy.lib.muohio.edu/10.2139/ssrn.1578175

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s