Do backers prefer crowdfunding or pre-order? An empirical study.

Area of Science:

• Business and Economics
• Technology Innovation
• Consumer Behavior

Background:

• Crowdfunding platforms are utilized for demand estimation and product advertising.
• Limited research exists on consumer preferences between early-stage crowdfunding projects and pre-order items.
• Understanding these preferences is crucial for product launch strategies.

Purpose of the Study:

• To analyze backer preferences between crowdfunding projects and pre-order items.
• To investigate differences in fundraising outcomes based on product stage.
• To determine if backers exhibit risk aversion on crowdfunding platforms.

Main Methods:

• Collected 1,800 technology and innovation campaigns from the Indiegogo platform.
• Classified campaigns into 'crowdfunding projects' (concept/prototype) and 'pre-order items' (production/shipping).
• Employed propensity score matching to compare fundraising performance.

Main Results:

• Pre-order items demonstrated superior fundraising outcomes compared to crowdfunding projects.
• A statistically significant difference in success rates was observed between the two categories.
• The findings indicate a tendency towards risk aversion among backers.

Conclusions:

• Backers on crowdfunding platforms show a preference for pre-order items over early-stage projects.
• This preference suggests that backers are risk-averse, favoring products with lower perceived risk.
• Implications for businesses include optimizing product launch strategies based on backer risk perception.