Co proposers in crowdfunding (muller et al. 2016)
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Social Ties in Organizational Crowdfunding: Benefits of Team-Authored Proposals Michael Muller, Mary Keough, John Wafer, Werner Geyer, Alberto Alvarez Saez, David Leip, and Cara Viktorov Social ties have been hypothesized to help people to gain support in achieving collaborative goals. We test this hypothesis in a study of organizational crowdfunding (or “crowdfunding behind the firewall”). 201 projects were proposed for peer-crowdfunding in a large international corporation. The crowdfunding website allowed people to join a project as Co-Proposers. We analyzed the funding success of 114 projects as a function of the number of (Co-)Proposers. Projects that had more co-proposers were more likely to reach their funding targets. Using data from an organizational social-networking service, we show how employees’ social ties were associated with these success patterns. Our results have implications for theories of collaboration in social networks, and the design of crowdfunding websites. CSCW 2016 Conference
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Co proposers in crowdfunding (muller et al. 2016)
- 1. Social Ties in Organizational Crowdfunding: Projects with Visible Members are More Successful Michael Muller*, Mary Keough**, JohnWater**, WernerGeyer*,Alberto Alvarez Saez**, David Leip**, CaraViktorov** *IBM Research and **IBM michael_muller@us.ibm.com CSCW 2016 1
- 2. Outline • Crowdfunding – quick introduction – On the Internet – Inside an organization: Democratizing innovation • The myth of the solitary entrepreneur – Teams of project proposers • What happens if the team of proposers is highly visible? – Project success– Project success – Mediated by social ties • Implications and conclusions 2
- 3. Crowdfunding on the Internet • Sites like Kickstarter, Indiegogo, Rockethub • Proposer creates a project description – Publishes at a crowdfunding site • Investors (“backers”) may contribute funds to the project – Often small contributions – Often motivated by rewards, such as • Early access to the outcome• Early access to the outcome • Discounted purchase of the proposed product • Acknowledgement or thanks in product/literature • Sometimes no reward • If a project achieves its funding threshold, then it is “successful” – Funds are allocated to proposer 3
- 4. Background • Economic and business theorists [Belleflamme et al., 2012; Mollick, 2012; Ordanini et al., 2011] – “microfinance” [Mollick, 2012] • Collaboration and competition in crowdfunding [Lin et al., 2014; Renault, 2014] • Success factors [Belleflamme et al., 2012; Bock et al., 2014; Burtsch et al., 2013; Etter et al., 2013; Greenberg & Gerber, 2014; Greenberg et al., 2013a, 2013b; Harburg et al., 2015; Harms, 2007; Hui et al., 2013, 2014a; 2014b; Mollick, 2012; Muller et al., 2013, 2014; Ordanini et al., 2011; Zvilichovsky et al., 2014]Ordanini et al., 2011; Zvilichovsky et al., 2014] – Active promotion of ideas to strangers [Muller et al., 2013; Sakamoto and Nakajima, 2013] – “Friends and family” [Agarwal et al., 2015; Bock et al., 2014; Burtsch et al., 2013] – Exploit social ties [Agarwal et al., 2015; Lu et al., 2014], shown ethnographically by Harburg et al. [2015], quantitatively by Mollick [2012] • Social capital and social ties – Theorized more generally by Granovetter [1973] 4
- 5. Myth of the Solitary Entrepreneur • Attractive to individualist culture focused on leaders – Reified in the design of crowdfunding platforms like Kickstarter – A nearly “classic” example of concepts of Friedman (Value Sensitive Design, e.g., [2006]) and of Winner (Do Artifacts Have Politics?)[1976] • Hui and Gerber: Ethnographic analysis [2013, 2014a, 2014b] – Projects often require a group of people to create a persuasive proposal [Hui et al., 2014a; Lin et al., 2014] – Proposers help one another in an informal community of practice • Mollick; Zvilichovsky: Quantitative analysis [Mollick, 2012; Zvilichovsky et al., 2014] – Similar conclusions • However, most Internet sites display only the name of a single proposer – Exception: RocketHub • We also assumed that there was a unitary project proposer – Until… 5
- 6. Organizational Crowdfunding 2012-2014 • Organization assigns budget to each participant • Proposer submits project – • Participants invest • Funded project receive immediate executive support + operational assistance 6
- 7. Organizational Crowdfunding 2012-2014 • Organization assigns budget to each participant • Proposer submits project – Mid-2015 • Organization assigns budget to each participant • Proposer submits project – Proposer displays names of co-Proposers in project • Participants invest • Funded project receive immediate executive support + operational assistance co-Proposers in project description • Peers invest • Funded project receive immediate executive support + operational assistance 7
- 8. Example of Projects with and without Members ProposerandCo-Proposers appearattopofpage C Engaging B Project with co-Proposers Engaging By Amy Blanks,Ling Shin, Bill Ranney, Sam Curmer, Nora Chen, and Rita Ferrar Project with no Co-Proposers by Nora Chen A No Co-Proposers Has Co-Proposers Proposal Details 8 Co-Proposers Original Proposer detailed view of one proposal Ling Shin Bill Ranney Sam Curmer Nora Chen Rita Ferrar Amy Blanks by Amy Blanks et al.
- 10. Are projects with Co-Proposers More Successful? • More people to do the work – However, they have always been involved (Hui and Gerber) • More visible people more opportunity for their social networks to self-engage • Social ties in crowdfunding – “Friends and family” (Agarwal et al.) – Importance of activation of social ties to elicit crowdfunding support (Hui; Moisseyev; Mollick) • Importance of social ties for collaboration and community – Granovetter 10
- 11. Data Sets • Crowdfunding service, ifundIT – Activity log of proposals, investments, comments … For each project: • Proposer • Co-Proposers • Investors • Investments • Social networking service, IBM Connections Profiles – Features from the Beehive project (Di Micco, Geyer, Millen et al.) For each person: • Friend links (bi-directional) 11
- 12. Proposer, Co-Proposers, and their Social Ties Proposer 12 Proposer
- 13. Proposer, Co-Proposers, and their Social Ties Co-Proposers 13
- 14. Proposer, Co-Proposers, and their Social Ties Co-Proposers 14 Investors
- 15. Data Issues (1) • 201 projects analyzed – Removed 3 outlier projects • Can we predict success/failure based on number of Co-Proposers? – Success/failure is a binary – Add “Velocity” measures with close to continuous variables: Investors / Dayvariables: Investors / Day Dollars / Day 15
- 16. Research Hypotheses: Focus on Co-Proposers Core hypotheses • RH1: Projects with more Co-Proposers will be more successful – RH1a: … as measured by Success/Failure to raise targeted funding level – RH1b: … as measured by Investors / Day – RH1c: … as measured by Dollars / Day • RH2: Projects with more Co-Proposers more social ties • RH3: Projects with more social ties more socially-tied investors (people) • RH4: Projects with more socially-tied investors more socially-tied• RH4: Projects with more socially-tied investors more socially-tied investments (dollars) Additional hypotheses • RH5: Projects with more Co-Proposers more socially-tied investors (people) • RH6: Projects with more Co-Proposers more socially-tied investments (dollars) 16
- 17. Results 17
- 18. Data Description Variable Count or Range Proposers 174 Co-Proposers 266 Co-Proposers per project 0 – 15 (analyzed: 0 – 6) Investors 3243 Investors per project 0 – 138 Projects proposed (total) 204Projects proposed (total) 204 Projects proposed (analyzed) 201 Target funding $10,000K - $250,000 Successful (fully-funded) projects 115 (analyzed: 114 (56.7%)) Diversity measures Countries of Proposers 19 Countries of Co-Proposers 31 Countries of Investors 55 18
- 19. Data Description Variable Count or Range Proposers 174 Co-Proposers 266 Co-Proposers per project 0 – 15 (analyzed: 0 – 6) Investors 3243 Investors per project 0 – 138 Projects proposed (total) 204Projects proposed (total) 204 Projects proposed (analyzed) 201 Target funding $10,000K - $250,000 Successful (fully-funded) projects 115 (analyzed: 114 (56.7%)) Diversity measures Countries of Proposers 19 Countries of Co-Proposers 31 Countries of Investors 55 19
- 20. Data Issues (2) • Non-normal distributions of independent and dependent data • Nonparametric statistics – Theil-Sen slope estimator (evaluated throughKendall tau 0 20 40 60 80 100 120 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 NumberofProjects Number of Members per Project (evaluated throughKendall tau for significance testing) [Theil, 1950] • Similar to OLS regression slope – Jonckheere-Terpstra S statistic (evaluated through Z transformation for significance testing) [Jonckheere, 1954] • Similar to OLS trend analysis • Repeated tests on same dataset – Bonferroni adjustment for significance levels [Bonferroni 1936; Dean, 1959] 20
- 21. The Core Components of the Analysis (Figure 3) Proposer Proposer’s Social Ties Proposer’s Socially-tied Investors Proposer’s Socially-tied Investments ($) Project Success Co-Proposers’ Co-Proposers’ Co-Proposers’ 21 p < .001b Co-Proposers’ Social Ties Co-Proposers’ Socially-tied Investors Co-Proposers’ Socially-tied Investments ($) Co-Proposers
- 22. More Sensitive Outcome Measures Proposer Proposer’s Social Ties Proposer’s Socially-tied Investors Proposer’s Socially-tied Investments ($) Project Success Co-Proposers’ Co-Proposers’ Co-Proposers’ 22 p < .001b Co-Proposers’ Social Ties Co-Proposers’ Socially-tied Investors Co-Proposers’ Socially-tied Investments ($) Co-Proposers Investors per Day Dollars per Day
- 23. RH1a, RH1b, RH1c Proposer Proposer’s Social Ties Proposer’s Socially-tied Investors Proposer’s Socially-tied Investments ($) Project Success Co-Proposers’ Co-Proposers’ Co-Proposers’ RH1: Projects with more co-proposers are more likely to be successful 23 p < .001b Co-Proposers’ Social Ties Co-Proposers’ Socially-tied Investors Co-Proposers’ Socially-tied Investments ($) Co-Proposers p < .05 Investors per Day Dollars per Day p < .01 p < .01RH1b RH1c RH1a
- 24. RH2 Proposer Proposer’s Social Ties Proposer’s Socially-tied Investors Proposer’s Socially-tied Investments ($) Project Success Co-Proposers’ Co-Proposers’ Co-Proposers’ RH2: More Co-Proposers More social ties 24 p < .001b Co-Proposers’ Social Ties Co-Proposers’ Socially-tied Investors Co-Proposers’ Socially-tied Investments ($) p < .000001 Co-Proposers p < .05 Investors per Day Dollars per Day p < .01 p < .01RH1b RH1c RH1a RH2
- 25. RH3 Proposer Proposer’s Social Ties Proposer’s Socially-tied Investors Proposer’s Socially-tied Investments ($) Project Success Co-Proposers’ Co-Proposers’ Co-Proposers’ RH3: More social ties More socially-tied investors 25 p < .001b Co-Proposers’ Social Ties Co-Proposers’ Socially-tied Investors Co-Proposers’ Socially-tied Investments ($) p < .000001 Co-Proposers p < .05 Investors per Day Dollars per Day p < .01 p < .01RH1b RH1c RH1a RH2 p < .000001b RH3
- 26. RH4 Proposer Proposer’s Social Ties Proposer’s Socially-tied Investors Proposer’s Socially-tied Investments ($) Project Success Co-Proposers’ Co-Proposers’ Co-Proposers’ RH4: More socially-tied investors More socially- tied investmehts 26 p < .001b Co-Proposers’ Social Ties Co-Proposers’ Socially-tied Investors Co-Proposers’ Socially-tied Investments ($) p < .000001 Co-Proposers p < .05 Investors per Day Dollars per Day p < .01 p < .01RH1b RH1c RH1a RH2 p < .000001b p < .000001b RH3 RH4
- 27. RH5 Proposer Proposer’s Social Ties Proposer’s Socially-tied Investors Proposer’s Socially-tied Investments ($) Project Success Co-Proposers’ Co-Proposers’ Co-Proposers’ RH5: More Co-Proposers More socially-tied investors 27 p < .001b Co-Proposers’ Social Ties Co-Proposers’ Socially-tied Investors Co-Proposers’ Socially-tied Investments ($) p < .000001 Co-Proposers p < .05 p < .000001b Investors per Day Dollars per Day p < .01 p < .01 RH5 RH1b RH1c RH1a RH2 p < .000001b p < .000001b RH3 RH4
- 28. RH6 Proposer Proposer’s Social Ties Proposer’s Socially-tied Investors Proposer’s Socially-tied Investments ($) Project Success Co-Proposers’ Co-Proposers’ Co-Proposers’ RH6: More Co-Proposers More socially-tied investments 28 p < .001b Co-Proposers’ Social Ties Co-Proposers’ Socially-tied Investors Co-Proposers’ Socially-tied Investments ($) p < .000001 Co-Proposers p < .05 p < .000001b p < .000001b Investors per Day Dollars per Day p < .01 p < .01 RH5 RH1b RH1cRH6 RH1a RH2 p < .000001b p < .000001b RH3 RH4
- 29. Similar for Proposers Proposer Proposer’s Social Ties Proposer’s Socially-tied Investors Proposer’s Socially-tied Investments ($) Project Success Co-Proposers’ Co-Proposers’ Co-Proposers’ p < .000001 p < .000001b p < .000001b Similar outcomes for social ties of proposers 29 p < .001b Co-Proposers’ Social Ties Co-Proposers’ Socially-tied Investors Co-Proposers’ Socially-tied Investments ($) p < .000001 Co-Proposers p < .05 p < .000001b p < .000001b Investors per Day Dollars per Day p < .01 p < .01 RH5 RH1b RH1cRH6 RH1a RH2 p < .000001b p < .000001b RH3 RH4
- 30. Research Hypotheses Core hypotheses RH1: Projects with more Co-Proposers will be more successful RH1a: … as measured by Success/Failure to raise targeted funding level RH1b: … as measured by Investors / Day RH1c: … as measured by Dollars / Day Social ties RH2: Projects with more Co-Proposers more social ties RH3: Projects with more social ties more socially-tied investors (people) RH4: Projects with more socially-tied investors more socially-tied investments (dollars) Additional hypotheses RH5: Projects with more Co-Proposers more socially-tied investors (people) RH6: Projects with more Co-Proposers more socially-tied investments (dollars) 30
- 31. Another Way to Analyze the Data 31
- 32. Research Hypotheses: Focus on Aggregated Proposer Team Core hypotheses • RH7: Projects with more Aggregated Proposers will be more successful – RH7a: … as measured by Success/Failure to raise targeted funding level – RH7b: … as measured by Investors / Day – RH7c: … as measured by Dollars / Day • RH8: Projects with more Proposers more social ties • RH9: Projects with more social ties more socially-tied investors (people) • RH10: Projects with more socially-tied investors more socially-tied• RH10: Projects with more socially-tied investors more socially-tied investments (dollars) 32
- 33. Combine Proposers and Co-Proposers into a Single Team (Figure 4) Proposers’ + Co-Proposers’ Co-Proposers’ Proposer + 33 Project Success Proposers’ + Co-Proposers’ Social Ties Co-Proposers’ Socially-tied Investors Co-Proposers’ Socially-tied Investments ($) Proposer + Co-Proposers Investors per Day Dollars per Day
- 34. RH7a, RH7b, RH7c Proposers’ + Co-Proposers’ Co-Proposers’ Proposer + RH7: Projects with more proposers are more likely to be successful 34 Project Success Proposers’ + Co-Proposers’ Social Ties Co-Proposers’ Socially-tied Investors Co-Proposers’ Socially-tied Investments ($) Proposer + Co-Proposers p < .008 p < .0002 Investors per Day Dollars per Day p < .0002 RH7b RH7c RH7a
- 35. RH8 Proposers’ + Co-Proposers’ Co-Proposers’ Proposer + p < .000001 RH8 RH8: More social ties More socially-tied investors 35 Project Success Proposers’ + Co-Proposers’ Social Ties Co-Proposers’ Socially-tied Investors Co-Proposers’ Socially-tied Investments ($) Proposer + Co-Proposers p < .008 p < .0002 Investors per Day Dollars per Day p < .0002 RH7b RH7c RH7a
- 36. RH9 Proposers’ + Co-Proposers’ Co-Proposers’ Proposer + p < .000001 p < .000001b RH8 RH9 RH9: More socially-tied investors More socially- tied investment 36 Project Success Proposers’ + Co-Proposers’ Social Ties Co-Proposers’ Socially-tied Investors Co-Proposers’ Socially-tied Investments ($) Proposer + Co-Proposers p < .008 p < .0002 Investors per Day Dollars per Day p < .0002 RH7b RH7c RH7a
- 37. RH10 Proposers’ + Co-Proposers’ Co-Proposers’ Proposer + p < .000001 p < .000001b RH8 p < .000001b RH10 RH9 RH10: More social ties More socially-tied investment 37 Project Success Proposers’ + Co-Proposers’ Social Ties Co-Proposers’ Socially-tied Investors Co-Proposers’ Socially-tied Investments ($) Proposer + Co-Proposers p < .008 p < .0002 Investors per Day Dollars per Day p < .0002 RH7b RH7c RH7a
- 38. Research Hypotheses: Focus on Aggregated Proposer Team Core hypotheses RH7: Projects with more Proposers will be more successful RH7a: … as measured by Success/Failure to raise targeted funding level RH7b: … as measured by Investors / Day RH7c: … as measured by Dollars / Day RH8: Projects with more Proposers more social ties RH9: Projects with more social ties more socially-tied investors (people) RH10: Projects with more socially-tied investors more socially-tiedRH10: Projects with more socially-tied investors more socially-tied investments (dollars) 38
- 39. What Kinds of Social Ties? 39
- 40. Employee Attributes: Homophilous Social Ties • Homophily: “Birds of a feather flock together” • Faceted Social Identity:“Which attributes-in-common explain the homophily-driven behavior?” • Re-analyze the predictive relationships in terms of social identity facets-in-common (attributes-in-common), separately – Proposers Co-Proposers – Aggregated (Co-)Proposers Investors– Aggregated (Co-)Proposers Investors 40
- 41. Which Social Identity Facets Matter, & to Whom? b Significance level after Bonferroni correction * Initially significant, but not significant after Bonferroni correction • Why does homophily affect (Co-)Proposers-and-Investors, but not Relationship Proposers & Co-Proposers (Co-)Proposers & Investors Facet (Attribute-in-Common) Country Division Dept. Country Division Dept. Success Investors/Day Dollars/Day n.s. n.s. n.s. p<.009b n.s.* n.s.* n.s. n.s. n.s. p<.001b p<.001b p<.001b p<.001b p<.001b p<.001b p<.001b n.s.* n.s.* • Why does homophily affect (Co-)Proposers-and-Investors, but not Proposers-and-Co-Proposers? • Hui and Gerber: Proposers choose their Co-Proposers for necessary skills • Perhaps skill-based selection is stronger than homophily for Proposers-and- Co-Proposers relationships 41
- 42. But what if there is an Alternative Explanation? 42
- 43. Alternative Explanation • What if the proposer is a manager – Are investments coerced from the people who report to that manager? Concept or Relationship Count Percent (Co-)Proposer is a Manager 41 Projects 20% … and in which an investor is a direct- report (“Report”) to that Manager 38 Projects 19% How many all (Co-)Proposer-Investor 1455 Manger- 8% • Only 8% of investments were configured such that a coercion was possible • The alternative explanation would not affect 92% of investments 43 How many all (Co-)Proposer-Investor pairs were configured as Manager- Report 1455 Manger- Report pairs out of 19,512 pairs across all projects 8%
- 44. Summing Up 44
- 45. Conclusions (1) • Findings Quantitative support for the ethnographic report of Hui and Gerber: Collaboration matters in crowdfunding [Hui et al., 2013, 2014a, 2014b] Groups are more successful than individuals [Greenberg et al., 2013a, 2013b, 2014] Part of the effect is mediated through social ties [Hui et al., 2013, 2014a, 2014b; Mollick, 2012; Muller et al., 2014] • Theory• Theory Social ties matter in (organizational) crowdfunding [Agarwal et al., 2015; Lu et al., 2014; Mollick, 2012; Zvilichovsky, 2014] Ties of the proposer, Ties of the co-proposers • Perhaps ties of the investors? (future work) – Further study • Is tie-strength is important, or is it only the existence of a tie? • Some social ties are created through the crowdfunding: Do proposers and investors increase their social networks through participation in crowdfunding? (thanks to Tanja Aitamurto) 45
- 47. Expand to the Social Ties of the Investors? Co-Proposers 47 Investors Social ties of the Investors
- 48. Conclusions (2) • Findings Quantitative support for the ethnographic report of Hui and Gerber: Collaboration matters in crowdfunding [Hui et al., 2013, 2014a, 2014b] Groups are more successful than individuals [Greenberg et al., 2013a, 2013b, 2014] Part of the effect is mediated through social ties [Hui et al., 2013, 2014a, 2014b; Mollick, 2012; Muller et al., 2014] • Theory• Theory Social ties matter in (organizational) crowdfunding [Agarwal et al., 2015; Lu et al., 2014; Mollick, 2012; Zvilichovsky, 2014] Ties of the proposer, Ties of the co-proposers • Perhaps ties of the investors? (future work) – Further study • Is tie-strength is important, or is it only the existence of a tie? • Some social ties are created through crowdfunding [Muller et al., 2014]: Do proposers and investors increase their social networks through participation in crowdfunding? (thanks to Tanja Aitamurto) 48
- 49. Conclusions (3) • Design – Crowdfunding sites, and proposers at those sites, may be able to increase success rates by making collaborators more visible – Should platforms provide support to engage the social networks of investors who commit to a project? • Systems – Recommendation agents to help recruit co-proposers and investors– Recommendation agents to help recruit co-proposers and investors • Organizations – Innovation teams are stronger than solitary individuals – Organizational crowdfunding is a promising approach to • Engage the workforce • Democratize innovation 49
- 50. Presentation available at Slideshare.net http://www.slideshare.net/traincroft/co-proposers-in-crowdfunding-muller-et-al-2016-58941402 or fromor from michael_muller@us.ibm.com 50