Want to win at Kickstarter? Want to take advantage of new opportunities?
First of all, perhaps I should explain what it is. Wikipedia says, here: Kickstarter is the world’s largest crowdfunding platform. Since its launch, more than 5 million people have funded more than 50,000 creative projects, such as films, music, stage shows, comics, journalism, video games, and food-related projects.
I’ve mentioned crowdfunding, a comparatively new form of raising funds for a project, typically in start-up mode. Also called crowd financing, equity crowdfunding, crowd equity, crowd-sourced fundraising, it’s the collective effort of individuals who network and pool their money, usually via the Internet, to support efforts initiated by other people or organisations. It can also refer to the funding of a company by selling small amounts of equity to many investors. It’s a bit like a small-scale IPO. See Wikipedia here for more information.
Crowdfunding involves a variety of participants, including proposers of ideas and/or projects to be funded and the crowd of people who support the proposals. Support is then provided by an organisation (the “platform”) to bring together the project initiator/proposer and the crowd.
Kickstarter is such a platform.
Two researchers at the Georgia Institute of Technology, Tanushee Mitra and Eric Gilbert, have analysed the language on 45,000 Kickstarter pages to find out whether specific words and phrases made a campaign more or less likely to meet its funding target. According to an article in Forbes, the researchers used a form of statistical analysis known as penalised logistic regression, and concluded, “The language used by creators to pitch their project plays a major role in driving the project’s success, accounting for 58.56% of the variance around success.”
Mitra and Gilbert compiled a list of the top 100 phrases that signalled a project was to be funded. You’ll have to wait until they reveal the answers at a conference in Baltimore next month.
In the meantime, the Forbes article titled: Four Secrets To A Moneymaking Kickstarter Campaign, makes interesting reading. It says that it’s already known that variables such as duration of campaign and presence of a video demo play a large part in influencing whether a project gets funded or not. Those variables alone can be used to predict success with an error rate of about 17%. But when the linguistic predictors identified by the study’s authors are added into the model, the error rate drops to 2.4%.
Forbes says that the researchers suggest Kickstarter and other crowdfunding platforms could use their findings to help users improve their odds of success through a help centre or FAQ. (Kickstarter already publishes other types of tips on its blog.) They might even want to incorporate them into some sort of autocorrect-type tool that would alert users when they’re using language that negatively predicts success.
Forbes suggest a few things would-be crowdfunding recipients should keep in mind:
- Convey confidence.
Phrases that convey a sense of assurance, such as “project will be,” are associated with higher success rates. Avoid phrases that carry a whiff of uncertainty or negativism.
- Don’t grovel.
In crowdfunding as in romance, desperation is the worst cologne. The authors identify the phrase “even a dollar” as an example of the sort of thing that turns would-be donors off. (Interestingly, Kickstarter’s tips blog suggests asking for $1 as a way to “make a great first impression.”)
- Stress the reward.
People will give more when they expect to get something in return. Phrases like “also receive two” and “mention your” (as in “mention your name”) are strong predictors of success. The rewards can even be metaphysical: “Good karma” made the list of the top 100 positive predictors.
- Make it sound like a rare opportunity.
Scarcity is a strong motivator. Use language that makes this sound like a one-time-only opportunity.
- Use social proof.
The phrase “has pledged” turns readers into donors by making them feel like other people like them have already contributed.
The Oscars for 2014 will be awarded next month. Last year, the true story of a 15-year-old homeless girl became the first Kickstarter-funded film to win an Oscar. Inocente was made with the help of $52,527 (£35,000) raised by 294 backers. The documentary film was awarded with the prize for best documentary short at the ceremony.
What an opportunity for accountants and lawyers. Armed with the information in this paper, they may be able to help clients succeed with this new form of funding.