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
Capstone slidedeck for my capstone final edition.pdf
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
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
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 ($)
Co-Proposers
p < .05
Investors
per Day
Dollars
per Day
p < .01
p < .01RH1b
RH1c
RH1a
26. RH4
Proposer
Proposer’s
Social Ties
Proposer’s
Socially-tied
Investors
Proposer’s
Socially-tied
Investments ($)
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 ($)
p < .000001
Co-Proposers
p < .05
p < .000001b
p < .000001b
Investors
per Day
Dollars
per Day
p < .01
p < .01
RH5
RH1b
RH1cRH6
RH1a
RH2
p < .000001b p < .000001b
RH3 RH4
30. Research Hypotheses
Core hypotheses
RH1: Projects with more Co-Proposers will be more successful
RH1a: … as measured by Success/Failure to raise targeted funding level
RH1b: … as measured by Investors / Day
RH1c: … as measured by Dollars / Day
Social ties
RH2: Projects with more Co-Proposers more social ties
RH3: Projects with more social ties more socially-tied investors (people)
RH4: Projects with more socially-tied investors more socially-tied
investments (dollars)
Additional hypotheses
RH5: Projects with more Co-Proposers more socially-tied investors
(people)
RH6: Projects with more Co-Proposers more socially-tied investments
(dollars)
30
32. Research Hypotheses: Focus on Aggregated Proposer Team
Core hypotheses
• RH7: Projects with more Aggregated Proposers will be more successful
– RH7a: … as measured by Success/Failure to raise targeted funding level
– RH7b: … as measured by Investors / Day
– RH7c: … as measured by Dollars / Day
• RH8: Projects with more Proposers more social ties
• RH9: Projects with more social ties more socially-tied investors (people)
• RH10: Projects with more socially-tied investors more socially-tied• RH10: Projects with more socially-tied investors more socially-tied
investments (dollars)
32
33. Combine Proposers and Co-Proposers into a Single Team
(Figure 4)
Proposers’ + Co-Proposers’ Co-Proposers’
Proposer +
33
Project Success
Proposers’ +
Co-Proposers’
Social Ties
Co-Proposers’
Socially-tied
Investors
Co-Proposers’
Socially-tied
Investments ($)
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
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%
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