Social Interaction and Crowdfunding Project Success: Moderating Roles of Product Development Stage and Product Innovativeness

Abstract

In recent years, crowdfunding has gained a lot of popularity as it helps to leverage the power of the crowd in the development and commercialization of new products. Thus, scholars are encouraged to explore factors that could enhance the success of these crowdfunding projects. Our study investigates the impact of social interaction (i.e., proactively updating the potential funders and seeking their feedback) on the success of the crowdfunding project among technology ventures. Moreover, we examine the moderating role of the product characteristics, i.e., product development stage and product innovativeness, on the relationship between social interaction and crowdfunding success. To test our hypotheses, we conducted two studies. For the first study, we collected and analyzed data from 203 Kickstarter projects from the mobile apps technology category. For the second study, we designed two short experiments with four hypothetical mobile apps technology projects each and collected data from 132 crowdfunders about their likelihood of supporting the projects. Both studies clearly highlight that social interaction has a significant positive impact on project success in terms of receiving funding and feedback among technological ventures. Our studies also suggest that products in the ideation stage benefit more from social interaction than products in the commercialization stage. Moreover, in contrast to our assumption, our findings indicate that the positive relationship between social interaction and project success is stronger for products with incremental innovativeness than radical innovativeness. Our study adds to the existing literature in crowdfunding by highlighting ways by which entrepreneurs can improve the success of their crowdfunding projects.