Product Development in Crowdfunding: Theoretical and Empirical Analysis

Sıdıka Tunç Candoğan, Philipp B. Cornelius, Bilal Gokpinar, Ersin Körpeoğlu, Christopher S. Tang
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Abstract

Problem definition: Crowdfunding goes beyond raising funds. Entrepreneurs often use crowdfunding to solicit feedback from customers to improve their products and may therefore prefer to launch their crowdfunding campaigns using basic versions of their products with fewer features. However, customers may not be persuaded by a campaign if the product appears to be underdeveloped. In view of this tradeoff, a key question for entrepreneurs is how much to develop a product before launching a crowdfunding campaign. Methodology/results: Analyzing a game-theoretical model and testing its predictions empirically, we study (1) how the development level of a product at campaign launch, measured by the initial number of product features, influences whether customers will make comments that help entrepreneurs improve the product; (2) whether entrepreneurs continue to improve the product during the campaign; and (3) whether the campaign is successful. We show that, as the number of product features at campaign launch increases, the likelihood that customers will make comments and that the product will be improved during the campaign first increases but then decreases. Furthermore, the likelihood of campaign success first increases but then decreases with the number of product features at campaign launch. Finally, by analyzing the interactions between customer feedback, product improvement, and campaign success, we show that customer feedback motivates entrepreneurs to improve the product during the campaign. Moreover, entrepreneurs should take account of the initial number of features and customer feedback when improving the product, because otherwise product improvements can harm campaign success. Managerial implications: Our study provides practical insights on how entrepreneurs can use crowdfunding to aid product development and improvement. Specifically, entrepreneurs should avoid overdeveloping their products before crowdfunding campaigns because, as well as decreasing the chance of campaign success, this could hinder their ability to save development costs (e.g., market research costs) through involving customers in product development.Supplemental Material: The online appendices are available at https://doi.org/10.1287/msom.2022.0344 .
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众筹中的产品开发:理论与实证分析
问题定义:众筹不仅仅是筹集资金。企业家通常利用众筹来征求客户的反馈意见,以改进产品,因此他们可能更愿意使用功能较少的基本版本产品来发起众筹活动。然而,如果产品看起来开发不足,顾客可能不会被活动说服。有鉴于此,创业者面临的一个关键问题是,在发起众筹活动之前,应将产品开发到什么程度。方法/结果:我们分析了一个博弈理论模型,并对其预测进行了实证测试,研究了:(1)以初始产品功能数量衡量的产品在众筹启动时的开发水平如何影响客户是否会提出意见以帮助创业者改进产品;(2)创业者是否会在众筹期间继续改进产品;以及(3)众筹是否成功。我们的研究表明,随着活动启动时产品功能数量的增加,顾客提出意见和产品在活动期间得到改进的可能性先增加后减少。此外,活动成功的可能性会随着活动启动时产品功能数量的增加而先增后减。最后,通过分析客户反馈、产品改进和活动成功之间的相互作用,我们发现客户反馈会激励创业者在活动期间改进产品。此外,创业者在改进产品时应考虑到初始功能数量和客户反馈,否则产品改进会损害活动的成功。管理意义:我们的研究为创业者如何利用众筹帮助产品开发和改进提供了实用的见解。具体而言,创业者应避免在众筹活动前过度开发产品,因为这不仅会降低活动成功的几率,还会阻碍他们通过让客户参与产品开发来节省开发成本(如市场调研成本)的能力:在线附录见 https://doi.org/10.1287/msom.2022.0344 。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
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