Crowdfunding

Djelassi and Decoopman 2016 3+ 3-

+ Crowdfunding - helps smaller businesses implement projects + Crowdfunding allows generation Y to exert their involvement in a brand and become shareholders +forms relationship - puts trust in consumer -increase in effort and cost from management - must fit company culture/structure (could be viewed as exploiting consumers for easy money) -must provide incentives to match donations

Oculus Rift - Success and failure How much raised by how many Summary 2 C+4 O+3 O-1 C-3

9,500 backers pledged $2.5mil Kickstarter - various incentives - increased with pledge amount (tshirts to developed kits) Sold to Facebook for 2bil - made a profit and exploited donators - showed disinterest in product more interest in profit (distrust of FB owning all - defeats purpose of helping start-ups) Consumer benefits: support valued concept, further research into immersive gaming, enter community of discussion, relationship form Organ benefits: cheaper, identify TA, trusting relationship Org cons: bad reputation to OR and the inventor Consumer cons: exploited and cheated for a profit, immoral, didn't help start-ups just fund big org for free

Howe 2006

A business practice that outsources an activity to a crowd

Arolas and Guevara 2012

Combines all definitions to create the following checklist; Crowdsourcing involves an organisation outsourcing business activities to a crowd using the internet and defining owed compensation for participation

Bellaflamme, Lambert & Schwienbacher, 2013

Crowdfunding involves an open call, mostly through Internet, for the provision of financial resources either in form of donation or in exchange for the future product or some form of reward to support initiatives for specific purposes

Pazowski and Czudec 2014 Conc Org+4 Cons+5 Org-3 Cons+2

Crowdfunding is better for the community than organisation - funds start ups and inc investment opportunities Organisation benefits: lowers costs, access consumer perceptions, specifies who their target market is, increases company reputation, Consumer benefits: support a valued organisation, member of community, contributor to successful project, build personal network, learn to self-crowdfund Organisational discentives: could be funded by anyone (criminals), risk of failure to meet campaign goals, risk of consumers disclosing private info Consumers: may fund poor project and waste money, may fund immoral company - cheated

Xu et al 2016 Sponsor satisfaction - 6 Theory How to CF 2 Cons Satis - 3 Cons unsatis - 2 Key thought

Focus on sponsor satisfaction, main criteria: project management, timeliness, novelty, quality, sponsor participation and entrepreneur activities Complexity theory - high levels of uncertainty in business activities Brands focus on investing in attracting consumers to donate, need to focus on satisfaction at implementation of project (focus on segmenting young/old) Consumers are satisfied from; accomplishment, quality, timeliness to complete the project Consumers are unsatisfied from late delivery and low quality - waste of money

Best for Britain Summary 2 How many raised how much O+3 O-2 C+3 C-3

Gina Miller (philanthropist behind the trigger of article 50 needing parliamentary support) crowdfund Funds go towards developing tactical voting for anti-Brexit political parties 11,000 donated £300,000 Org benefits - identifies consumers supporting issue, funds parties against brexit, forms community (reflects well on parties), Org costs - do not know who is funding (criminals), pressure to achieve outcome - gofundme Cons bene - support valued concept, community member, empowers consumer to help, Cons costs - uncertainty with money, might not help the cause, potential for exploitation

Saxton et al. 2013 3 issues

Main issue with CS - management of online communities due to easy web designs and cheap internet usage can attract anyone to partake Managing collective intelligence and labour skills - management effort increases CS assumes the flexibility of skills recruited online are wider than professionals, and that crowds are wise (Can recruit competitors, who are then enabled to access more info about a company)

Organisational Benefits PC - 4 DD-3 X-3

P and C - lowers costs, access consumer perceptions, specifies who their target market is, increases company reputation, D and D - Crowdfunding - helps smaller businesses implement projects, Crowdfunding allows, generation Y to exert their involvement in a brand and become shareholders, forms relationship - puts trust in consumer X - Must pay attention to who is donating (young or old), Brands focus on investing in attracting consumers to donate, need to focus on satisfaction at implementation of project,

Consumer Disads PC-2 X-2

P and C - may fund poor project and waste money, may fund immoral company - cheated X - unsatisfied from late delivery and low quality - waste of money

Organisational Disads PC-2 DD-3 S - 2

P and C - risk of failure to meet campaign goals, risk of consumers disclosing private info D and D - -increase in effort and cost from management, must fit company culture/structure (could be viewed as exploiting consumers for easy money), must provide incentives to match donations S - management of online communities due to easy web designs and cheap internet usage can attract anyone to partake, Can recruit competitors, who are then enabled to access more info about a company

Consumer Ads PC-5 DD-2 X-3

P and C - support a valued organisation, member of community, contributor to successful project, build personal network, learn to self-crowdfund D and D - Crowdfunding allows generation Y to exert their involvement in a brand and become shareholders, forms relationship - puts trust in consumer X - accomplishment, quality, timeliness to complete the project

Abernathy and Frongillo '11

Proposed the Crowdsourcing Learning Mechanism Participants are given a hypothesis, have to work together to figure out the best way to solve it (participants bet, and receive compensation if they are correct) The more effort they put in, the more financial incentive they get out Weaknesses with typical CS - not collaborative (users are encouraged to keep ideas private not sharing as a crowd) Winners are the only ones who receive compensation (makes no sense to compete if you can't win) Competitors using private technology cannot compete as they do not wish to disclose their ideas