Invited talk at Future of Crowdfunding Conference 2013 (http://www.future-crowdfunding.de) in Berlin (Germany), April 17, 2013.

1. Dennis Brüntje, Anja Solf
Institute of Media and Communication Science,
Department of Media Management
Crowdinvesting-Conference – April 17, 2013 – Berlin
Crowdfunding and
Co-Creation
What are fruitful interconnections?

2. Outside-in perspective
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Image: Thinkstock.com

3. Crowdfunding
Co-Creation
Interconnections
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4. Crowdfunding
Co-Creation
Interconnections
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5. Our crowdfunding research
• What we do
• Recent projects
– Analysis of communication in equity-based crowdfunding
– Analysis of success factors and motivation criteria
– Crowdfunding as Social Media Tool for SMEs (Cofunding)
– Crowdfunding in various media markets
– Crowdfunding in science
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Empirical
research
Consulting
Starters/ start-ups
Platforms
Scientific
support
Platforms

6. How we see crowdfunding ...
• Established partial financing for projects & start-ups
• Leads to cultural diversity & enriches start-up-scene
• Requires strategic communication
• Main principles: Reputation, transparency & trust
• Marketing tool
• Allows crowd involvement (crowdsourcing)
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7. Different actors
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Crowdfunding
Platforms
Starters /
start-ups
Supporters /
investors

8. Different actors
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Crowdfunding
Platforms
Starters /
start-ups
Supporters /
investors

9. What leads to success in reward-based
crowdfunding?(n=85)
• Campaign planning
• Project description
• Design of project page
• Pitch video
• Information about project status (blog)
• Financial goal
• plus: short project duration, number of supporters,
pledged budget
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Harzer (2013)

10. What leads to success in equity-based
crowdfunding?
• External communication:
– Same factors expected as above (+ business plan)
– Start-ups profit by platform publicity
• Probability of success:
– Opportunity recognition
– Intellectual Property
– Start-up team (entrepreneurial skills, motivation,
flexibility, market knowledge)
– Feasibility of the project
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Beck (2012), 48ff.; Alvarez & Barney (2007)

11. What leads to success in crowdfunding?
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 It‘s all about communication
Image: http://www.qllective.com

12. Different actors
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Crowdfunding
Platforms
Starters /
start-ups
Supporters /
investors

13. What motivates supporters?(n=89)
• Entertainment
• Curiosity
• Affiliation
• Empathy
• Idealism
• Less important: Rewards, appreciation and
responsibility, feeling of guilt, subjective norm
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Helm (2011), 67

14. What motivates investors?
Financial factors Non-financial factors Social factors
• High ROI
assumption
• Minimal
administration
effort
• Information &
controlling rights
• Voting rights
• Direct investments in
start-ups
• Aspiration supporting
local start-ups
• Being involved with
exciting start-up
technology
• Supporting self-
expression
• Prestige of
investing in
young
businesses
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Beck (2012), 52; Collins & Pierrakis (2012), 3, 25; Klöhn & Hornuf (2012), 239

15. Different actors
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Crowdfunding
Platforms
Starters /
start-ups
Supporters /
investors

16. Role of crowdfunding platforms
• Take role of an intermediate
• Enable financing, communication & information
• Create network effects
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e.g. Klöhn & Hornuf (2012)

17. Challenges in crowdfunding
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e.g. Beck (2012); Collins & Perrakis (2012); Hofmann (2012); Klöhn & Hornuf (2012)
communication
Regulation
information asymmetries
fraud detection fraud protection
follow-on financing
ROIrisk reduction
transparency
crowd vetting
post-investment support
due diligence
business valuation
Co-Creation
Consulting

18. Crowdfunding
Co-Creation
Interconnections
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19. Co-Creation Research
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20. What the Crowd wants …
• Reward
• Recognition
• More knowledge & better skills
• Interest
• Fun
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e.g. Brabham (2008); Archak (2010);
Missling (2011); Blitzer, Schrettl & Schröder (2004)

21. What the Crowd gets …
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“I think, if there was no monetary reward,
probably no one would participate.“
“Everyone‘s efforts do have its price.”
“To make people join for a long time and
be really motivated money is not
sufficient. What you need is recognition.“
Solf & Schultheiss (2013)

22. What creative crowds really need …
”iStockers find creating content fun and enjoyable, and
it gives them the chance to do the jobs they feel they
do best.“ (Brabham 2008)
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Flow and Sense

23. Profit vs. Sense and Flow (in Microworking)
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(Image: www.mturk.com)
• Challenge meets skills
• Task autonomy enhances creativity
• Profit competes against non-profit
• Meaningfulness increases participation
Kaufmann, Veit & Schulze (2011); Rogstadius et al. (2011); Chandler & Kapelner (2012)

24. More fun in idea-creation
Gamification by competition
• Tools: ratings, rankings, awards
• Collaboration vs. competition
• Contest causes pressure
Foster the flow!
Support skills, increase interest, inspire!
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25. More sense in idea-creation
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Market places
• Problems vs. search fields
• Rewarded solutions
Harness the crowds creative potential!
Grant autonomy, give advise, make innovation radical!

26. Creative Crowds need Autonomy
”Creativity is asking the question for which there is no
answer. And innovation is answering that question.“
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Idea vs. Solution
?!
(Gene Frantz, Texas Instruments, in: Stern 2012)

27. Creative Crowds need creative settings
• Expertise
• Skills
• Personality
• Money
• …
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Resources

28. Support means more than money …
“I told them, ‘No, I‘m not going to start Apple because I
just want to design neat computers. I don‘t want to run a
company because that‘s not my thing in life‘.“
(Steve Wozniak, in: Brown 1988)
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29. Crowdfunding
Co-Creation
Interconnections
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30. Funding Creative Processes
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Creative Process Prototype …

31. Platforms as innovation drivers
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Crowdfunding
& Co-Creation
Platforms
Starters /
start-ups
Supporters /
investors
Intermediates
Teams &
individuals
Financing &
human capital

32. What do you think?
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Image: http://www.omnioptics.de

33. Coming soon?
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InnoFund.me

34. References
• Alvarez, S. A., & Barney, J. B. (2007). Discovery and creation: Alternative theories of entrepreneurial action. Organizações em
context, 3(6), 123-152.
• Archak, N. (2010). Money, Glory and Cheap Talk: Analyzing Strategic Behavior of Contestants in Simultaneous Crowdsourcing
Contests on TopCoder.com. Proceedings of the 19th International Conference on World Wide Web, April 2010.
• Beck, R. (2012). Crowdinvesting – Die Investition der Vielen [Equity Crowdfunding – Investments by the crowd]. Leipzig: amazon.
• Bitzer, J., Schrettl, W. & Schroeder, P. J. H. (2004). Intrinsic motivation in open source software development, School of
Business & Economics. Discussion Paper: Economics, No. 2004/19. Retrieved February 15, 2013, from: http://hdl.handle.net/
10419/49926
• Brabham, D. C. (2008). Moving the crowd at iStockphoto: The composition of the crowd at motivations for participation in a
crowdsourcing application. First Monday, 13(6). Retrieved June 14, 2012, from: http://journals.uic.edu/fm/article/view/2159/1969
• Brown, K. A. (1988). Inventors at Work: Interviews with 16 notable American inventors. Washington: Tempus Books.
• Chandler, D. & Kapelner, A. (2012). Breaking Monotony with Meaning: Motivation in Crowdsourcing Markets. Journal of Economic
Behavior & Organization. Preprint retrieved April 4, 2013, from http://arxiv.org/pdf/1210.0962.pdf
• Collins, L. & Perrakis, Y. (2012). The Venture Crowd. Crowdfunding equity investments into business. Retrieved April 15, 2013,
from http://www.nesta.org.uk/library/documents/TheVentureCrowd.pdf
• Harzer, A. (2013). Erfolgsfaktoren im Crowdfunding [Success factors in Crowdfunding]. In Will, A./ Brüntje, D. (Eds.): Menschen –
Märkte – Medien – Management: Schriftenreihe; 7. Ilmenau: ilmedia. Also available from http://www.db-thueringen.de/servlets/
DocumentServlet?id=20873 [April 16, 2013].
• Helm, M. (2011). Träume finanzieren 2.0: Eine quantitative Befragung zu den Motivationen der finanziellen Projektunterstützung
auf deutschsprachigen Crowdfunding-Plattformen [Financing dreams 2.0: A quantitative survey about the motivations of financial
project supporting on German crowdfunding platforms]. Unpublished master thesis (other publication in progress).
• Hofmann, A. (2012): Crowdfunding: Revolution der Startup-Finanzierung? [Crowdfunding: Revolution of start-up financing?].
Retrieved April 15, 2013, from http://www.gruenderszene.de/allgemein/crowdfunding-revolution-der-startupfinanzierung
• Kaufmann N., Veit, D. & Schulze, T. (2011). More than fun and money. Worker Motivation in Crowdsourcing – A Study on
Mechanical Turk. Proceedings of the Seventeenth Americas Conference on Information Systems, August 4th-7th 2011, Detroit.
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35. References
• Klöhn, L. & Hornuf, L. (2012). Crowdinvesting in Deutschland. Markt, Rechtslage und Regulierungsperspektiven [Equity
crowdfunding in Germany. Market, legal situation, regulation perspectives]. ZBB – Zeitschrift für Bankrecht und Finanzwirtschaft
24(4), 237-266.
• Missling, E. (2011). Was motiviert die Crowd [What motivates the crowd?]. Retrieved February 12, 2013, from http://
www.crowdsourcingblog.de/blog/2011/07/02/was-motiviert-die-crowd/
• Rogstadius J., Kostakos, V., Kittur, A., Smus, B., Laredo, J. & Vukovic, M. (2011). An Assessment of Intrinsic and Extrinsic
Motivation on Task Performance in Crowdsourcing Markets. Proceedings of ICWSM. 2011, Aug 17-21 2011, Barcelona.
• Solf, A. & Schultheiss, D. (2013): Motivate the Crowd. General Online Research Conference (GOR), March 4-6 2013, Mannheim.
• Stern, B. (2012). Inventors at Work: The Minds and Motivation Behind Modern Invention. New York: Apress.
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36. Contact Information
Dipl.-Medienwiss. Dennis Brüntje
Dipl.-Medienwiss. Anja Solf
Department of Media Management
Institute for Media and Communication Science – Ilmenau University of Technology
Ernst-Abbe-Zentrum – Ehrenbergstraße 29 – D-98693 Ilmenau – Germany
T: +49-3677-69-4680 [Brüntje], -4629 [Solf]
F: +49-3677-69-4650
E: dennis.bruentje@tu-ilmenau.de, anja.solf@tu-ilmenau.de
www.tu-ilmenau.de/mm
www.facebook.com/FG.Medienmanagement
www.twitter.com/fg_mm
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