From the Pebble smartwatch to Cards Against Humanity and Mystery Science Theatre 3000, Kickstarter — and crowdfunding sites like it — have changed the way small, independent businesses raise capital to get their ideas off the ground.
New stats collected by a recently-graduated Wilfrid Laurier University student and assistant professor Kevin McDermott outline why some Kickstarter Campaigns are a runaway success, and others can't seem to get any momentum.
Looking at two years of Kickstarter campaign data, Andre Fischbacher compared fundraising results from 30,000 projects and after crunching the numbers, some patterns leading to success became evident.
"We developed a machine-learning algorithm and had it perform a statistical analysis on the data," he explained, "with over 60 million data points ... we began to see trends."
Results not guaranteed
Fishbacher warned that just because someone follows a best practice list, doesn't guarantee a successful campaign. Other factors such as the overall economic environment, or timing of the launch into the marketplace — such as if the product is seasonal in nature — can have a significant impact on the campaign's success.
Even though the research studied 30,000 cases, "there are still a lot of things that need to be looked at," he said, "but based on our research and what our testing has shown, we are able to predict the future success of a new campaign that the machine-learning algorithm has never seen before with up to 80 per cent accuracy."
Dos and don'ts quicklist
"It's not a magic sauce," he joked, "I wish we had the answer to everyone being a success."
But Fishbacher outlined factors that can help a social fundraising campaign promote its success "a little more effectively" in reaching its financial goal:
- Having a video "to describe your idea that you request funding for.
- Setting a lower funding goal "generally has a higher chance of success."
- Longer story lines, "more information about the product, service or idea."
- Shorter campaign lengths.
Correspondingly, the study showed that having the inverse of success factors, such as no video, shorter descriptions, or ideas that don't appear to be "as novel or genuinely entrepreneurial as others," led to disappointing results for those trying to crowdsource their fundraising.
"Using negative words [in the story line] generally tends to have a deterioriating factor on a campaign aiming for successful finding," he added.
Listen to Andre's interview on The Morning Edition with guest host Andrew Coppolino: