7 examples of data driven research on crowdfunding
Crowdfunding has grown rapidly over the last couple of years, both in terms of size of the overall market and the applications of the model. However, while some work has been done in trying to understanding the different uses of the model, how it works etc. (see the work we have done at Nesta on this here), practice is still far ahead of research. This is particularly the case when it comes to applying quantitative methods to analysing the dynamics of crowdfunding, and tapping into the often large amounts of data generated through people using online platforms.
However, a number of universities and researchers have begun exploring these opportunities. We have had a go at listing 7 of what think are some of the most interesting of these below. However, we are sure there are lots more out there, so if you know of any (or if you are working on one) let us know in the comments.
1. Launch Hard or Go home
In Launch hard or go home! Researchers from School of Computer and Communication Sciences École Polytechnique Fédérale de Lausanne (EPFL) in Switzerland developed a method for predicting whether or not Kickstarter campaigns will be successful. Within 4 hours of a campaign launching, the researchers can predict with 76% accuracy whether or not campaigns achieve their funding target. The method has since been turned into Sidekick, a Kickstarter success prediction tool.
2. Banking on Each Other
In Banking on Each other, researchers from Nesta found that 77% of companies using the Funding Circle lending platform were likely or very likely to approach Funding Circle first in the future, and even if banks offer a borrowing similar terms to funding circle in the future, only 27 per cent of the surveyed companies would approach banks first.
3. Show me the money
In Show me the Money: Opening up Big Data in Finance the Open Data Institute analysed trends in the UK peer-to-peer (P2P) lending by looking at open data from the three biggest P2P platforms operating in the UK (Zopa, RateSetter and Funding Circle). The work demonstrated how open financial data can lead to more financial transparency on lending and investment. Findings included how the four southern regions (London, South East, South West and the East of England) invest more than they receive and the variation in money lent and received across different regions and counties.
4. The Geography of Crowdfunding
In The Geography of Crowdfunding researchers from the University of Toronto analysed data from Sellaband, a platform where artists and fans can crowdfund music to understand the geographical dispersion of backers. One interesting finding was that the average distance between artists and investors was about 3,000 miles.
5. The Impacts of Social Media on Crowdfunding
In Inferring the Impacts of Social Media on Crowdfunding researchers from the University of Illinois study the link between social media activity and the success of campaigns. They find that activity and promotion on social media platforms such as Twitter and Facebook is a key factor in the success of crowdfunding campaigns.
6. The Language that Gets People to Give
In The Language that Gets People to Give: Phrases that Predict Success on Kickstarter researchers from the School of Interactive Computing Georgia Institute of Technology, USA, used text analysis tools to examine 45,000 crowdfunded projects pages and 9 million phrases contained within these. This enabled the researchers to reveal phrases commonly used in successful campaigns and those that are more prevalent in failed campaigns.
7. The Dynamics of Crowdfunding
In The Dynamics of Crowdfunding: An Exploratory Study Ethan Mollick analysed 48,500 projects to understand the underlying dynamics of success and failure among crowdfunded campaigns. His finding include demonstrating the role social networks and geography play in determining the potential success of projects and showed that while the vast majority of successfully funded campaigns deliver the promised product, 75% are delayed ( with overfunded campaigns being particularly prone to delay).
What research projects have we missed of the list? Let us know in the comments below.