***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: Crowd-funding: transforming customers into investors through innovative service platforms
I find this article to be a credible source as it is a peer reviewed article obtained via OhioLink. The authors received financial support from Bocconi University. In addition, the footnotes also explain the presentation was ﬁnalist for the Best Practitioners Presentation Award.
Through their research, the authors try to address the following questions using in-depth case study analysis of three crowd-funding initiatives: SellaBand (music business), Trampoline (ﬁnancial services), Kapipal (non-proﬁt services).
- How and why do consumers turn into crowd-funding participants?
- How and why do service providers set up a crowd-funding initiative?
The research analysis provided by this paper also offers valuable insights into investor behavior in crowd-funding service models, possible determinants of these behaviors, as well as variations in these behaviors and determinants across various service models.
Depending on the investment, people have different motivations for participating in crowd funding. With Sellaband (music industry), consumers primary motivation comes from the opportunity to be part of the band’s success by providing financial support.
For non-profits, (Kapipal) this research finds that consumers have a more altruistic motivation for social participation; a “participation spirit” as Kapipal describes.
“Kapipalists is that of helping in the realization of a small project, and the consumer who contributes is mainly a donor because she/he gives money without necessarily expecting or receiving any monetary reward.”
Non-profit crowd funding also offers a is a lower risk to funding participants as it requires a low investment minimum.
With financial crowd funded initiatives like Trampoline, funders are motivated by the possibility of monetary rewards for their their investment, in an early-stage new venture.
Relevancy to research project
My research project will focus partly on crowdfunding strategies for the non-profit space. This article helps address my secondary questions like – How do crowdsourcing strategies promote participation or action?
This article also provides an interesting comparison of the variety in motivation consumers have when supporting different types crowd funded projects.
Andrea Ordanini, Lucia Miceli, Marta Pizzetti, A. Parasuraman, (2011) “Crowd-funding: transforming customers into investors through innovative service platforms”, Journal of Service Management, Vol. 22 Iss: 4, pp.443 – 470