Strategic choices and performance in crowdfunding platforms
Investigating a vast array of crowdfunding platforms over two decades, this study explores the interplay of strategic choices, shedding light on their impact on platform survival and growth, thereby providing valuable insights for both entrepreneurs and academic scholars.
The challenge:
The challenge in launching a successful platform is how to get the flywheel of indirect network effects going. This means entrepreneurs have to (i) understand the different available strategies to do this, and (ii) recognise that these strategies are not independent of each other but can be mixed together to optimise indirect network effects.
Investigating a vast array of crowdfunding platforms over two decades, this study explores the interplay of strategic choices, shedding light on their impact on platform survival and growth, thereby providing valuable insights for both entrepreneurs and academic scholars.
The challenge:
The challenge in launching a successful platform is how to get the flywheel of indirect network effects going. This means entrepreneurs have to (i) understand the different available strategies to do this, and (ii) recognise that these strategies are not independent of each other but can be mixed together to optimise indirect network effects.
The research:
To date, research has focused on the large, successful platforms; there are few large-population studies on how to start a platform. To remedy this gap, the researchers compiled evidence on crowdfunding platforms in EU-15 countries over two decades; a population of 788 platforms. The study analysed the strategies the platforms used in order to identify common mixes of strategic choices; documenting not only platforms’ pricing strategies but also their non-pricing strategies.
The impact:
The research is significant for two main audiences. For platform entrepreneurs, the paper makes a threefold contribution: (i) identifying common mixes of strategic choices; (ii) tracking deviations from these mixes; and (iii) associating choices with platforms’ survival and growth.
For an academic audience, the sheer scale of the empirical investigation –documenting six strategic choices across hundreds of platforms – makes an important contribution to the literature, offering validation and extension of previous work. The results show that crowdfunding type is not a single, standalone choice but rather is associated with a broad mix of (pricing and non-pricing) strategic choices.
