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Professor, NYU Stern
ANINDYA GHOSE
TAPPING INTO THE CROWDVIA
CROWDFUNDING
Anindya Ghose
Professor of IOMS and Professor of Marketing
Co-Director, NYU Stern C...
A CROWDFUNDING
EXAMPLE:
REVOLIGHTS
Kent & Adam Supported by 1,442 People
Raised: $215,621Required Budget: $43,500
1
2
3
BACKGROUND: Why Do Individuals Offer Funds?
Rewards
(e.g., Early Game Release, Interest on Loan, Discount)
Social Identity ...
PROS & CONS
Gauge Market Interest Early
Refine Ideas /w Customer Input
Build Word-of-Mouth
Can Retain Ownership
Pros.
COMP...
OPPORTUNITIES
SCANNING
•  GET NEW IDEAS
•  STAY ABREAST OF COMPETITION
•  MANY NICHE PLATFORMS…
SOLAR POWER, MUSIC, MEDICA...
GROWING INDUSTRY:
$2.7B, NEARLY 600 PLATFORMS (+81% YoY)
4 TYPES: DONATION, REWARD, LENDING, EQUITY
SOME OF OUR RESEARCH (with Gordon
Burtch and SunilWattal)
How later contributors react
to prior others’ contributions.
Pre...
Summary of Results (Forbes and WSJ Interview)
•  Individuals are chiefly motivated by altruism and contributions are subjec...
CONTACT
Anindya	
  Ghose	
  
Professor	
  of	
  IOMS	
  and	
  Professor	
  of	
  Marke5ng	
  
Co-­‐Director,	
  NYU	
  St...
LEARN MORE ABOUT
NYC MEDIA LAB:
www.nycmedialab.org
@nycmedialab
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Tapping Into the Crowd via Crowdfunding

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In crowdfunded markets, anyone can propose an idea and bring it to life by harnessing funding and wisdom from a community of backers. Breakaway successes on platforms such as Kickstarter and Indiegogo have demonstrated how powerful crowdfunding can be, and the scale of impact it can have on traditional media. Anindya Ghose, NYU professor and Director of the NYU Center for Business Analytics, shared his insights from his analysis of a massive dataset of more than 1 trillion observations that map both investor and entrepreneur behavior during NYC Media Lab's Research Summit 2013.

This presentation was made at NYC Media Lab's Research Summit 2013 on September 19, 2013 at the Joseph Urban Theater at Hearst Tower. The Summit was a half-day deep dive into the Lab, featuring presentations and discussion on technologies and trends that are changing the industry. Corporate members also unveiled the results of NYC Media Lab's first round of seed research projects.

Learn more about NYC Media Lab: www.nycmedialab.org
Follow us on Twitter: @nycmedialab

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Transcript of "Tapping Into the Crowd via Crowdfunding"

  1. 1. Professor, NYU Stern ANINDYA GHOSE
  2. 2. TAPPING INTO THE CROWDVIA CROWDFUNDING Anindya Ghose Professor of IOMS and Professor of Marketing Co-Director, NYU Stern Center for Business Analytics Twitter @ aghose
  3. 3. A CROWDFUNDING EXAMPLE: REVOLIGHTS Kent & Adam Supported by 1,442 People Raised: $215,621Required Budget: $43,500 1 2 3
  4. 4. BACKGROUND: Why Do Individuals Offer Funds? Rewards (e.g., Early Game Release, Interest on Loan, Discount) Social Identity and Image (Associating Oneself With the Project) Altruism Equity (Coming Soon)
  5. 5. PROS & CONS Gauge Market Interest Early Refine Ideas /w Customer Input Build Word-of-Mouth Can Retain Ownership Pros. COMPARED TOVC FINANCING Reveal Idea Early Crowd May be Fickle Crowd May Lack Expertise Cons. Managing Diverse Expectations CONCEPTUALIZATION PLANNING PROTOTYPING REFINING MANUFACTURING SHIPPING THE CROWD FUNDS AN IDEA CUSTOMERS/VCs SUPPORT/PURCHASE A PRODUCT A Comparison. No Guidance/Mentoring + + %
  6. 6. OPPORTUNITIES SCANNING •  GET NEW IDEAS •  STAY ABREAST OF COMPETITION •  MANY NICHE PLATFORMS… SOLAR POWER, MUSIC, MEDICAL DEVICES MONETIZE CROWDSOURCING •  OPEN INNOVATION (CUSTOMER IDEATION) •  INTERNAL INNOVATION (EMPLOYEE IDEATION) •  REVENUE SHARING /w CUSTOMERS
  7. 7. GROWING INDUSTRY: $2.7B, NEARLY 600 PLATFORMS (+81% YoY) 4 TYPES: DONATION, REWARD, LENDING, EQUITY
  8. 8. SOME OF OUR RESEARCH (with Gordon Burtch and SunilWattal) How later contributors react to prior others’ contributions. Preference for campaigns by similar, local others. When, why contributors conceal information and impact on other contributors. Impact of crowdfunded medical expenses on bankruptcy rates (social impact) PEER INFLUENCE GEOGRAPHY & CULTURE PRIVACY & INFORMATION HIDING SOCIAL IMPACTS
  9. 9. Summary of Results (Forbes and WSJ Interview) •  Individuals are chiefly motivated by altruism and contributions are subject to crowding out. •  Partial crowding out (rather than complete), and thus impure altruism (warm glow) •  Longer funding durations lead to greater levels of pre-publication exposure and market awareness, which in turn leads to greater future demand. •  Projects that take twice as long to meet their fundraising target experience, on average, a 22% increase in demand after the project is completed
  10. 10. CONTACT Anindya  Ghose   Professor  of  IOMS  and  Professor  of  Marke5ng   Co-­‐Director,  NYU  Stern  Center  for  Business  Analy5cs     TwiEer  @  aghose  
  11. 11. LEARN MORE ABOUT NYC MEDIA LAB: www.nycmedialab.org @nycmedialab

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