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Does the Crowd Support Innovation? Innovation Claims and Success on Kickstarter

Author

Listed:
  • Yang, Cathy L.
  • Mukherjee, Anirban
  • Xiao, Ping
  • Chattopadhyay, Amitava

Abstract

Online crowdfunding is a popular new tool for raising capital to commercialize product innovation. Product innovation must be both novel and useful (1-4). Therefore, we study the role of novelty and usefulness claims on Kickstarter. Startlingly, we find that a single claim of novelty increases project funding by about 200%, a single claim of usefulness increases project funding by about 1200%, and the co-occurrence of novelty and usefulness claims lowers funding by about 26%. Our findings are encouraging because they suggest the crowd strongly supports novelty and usefulness. However, our findings are disappointing because the premise of crowdfunding is to support projects that are innovative, i.e. that are both novel and useful, rather than projects that are only novel or only useful.

Suggested Citation

  • Yang, Cathy L. & Mukherjee, Anirban & Xiao, Ping & Chattopadhyay, Amitava, 2017. "Does the Crowd Support Innovation? Innovation Claims and Success on Kickstarter," HEC Research Papers Series 1220, HEC Paris, revised 05 Sep 2017.
    • Handle: RePEc:ebg:heccah:1220
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    Cited by:

    1. Stefano Cascino & Maria Correia & Ane Tamayo, 2019. "Does Consumer Protection Enhance Disclosure Credibility in Reward Crowdfunding?," Journal of Accounting Research, Wiley Blackwell, vol. 57(5), pages 1247-1302, December.
    2. Calic, Goran & Shevchenko, Anton, 2020. "How signal intensity of behavioral orientations affects crowdfunding performance: The role of entrepreneurial orientation in crowdfunding business ventures," Journal of Business Research, Elsevier, vol. 115(C), pages 204-220.

    More about this item

    Keywords

    Crowdfunding; Entrepreneurship; Innovation;
    All these keywords.

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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