Some projects become sensations on the crowdfunding platform Kickstarter, racking up a disproportionately large amount of funds compared with other projects.
Take the video game Double Fine Adventure, which launched on Kickstarter in February 2012 with a goal of raising $400,000. The project raked in more than $3.3 million from over 87,000 backers, making it the largest project ever on Kickstarter at the time.
Zhiyi Wang
Recent research takes a closer look at the effect of so-called “blockbusters” to see what impact they have on other Kickstarter projects and how entrepreneurs can benefit.
The study, published in September 2023 in the journal Information Systems Research, was led by Zhiyi Wang, assistant professor of information systems at Leeds School of Business, and Lusi Yang, assistant professor in the J. Mack Robinson College of Business at Georgia State University, and co-authored by Jungpil Hahn, a professor in the Department of Information Systems and Analytics at the School of Computing at the National University of Singapore.
The researchers analyzed data from more than 186,000 Kickstarter projects from April 2009, the platform’s inception, through November 2014, and found that blockbusters attract both existing and new backers to the platform and have an overall positive effect on other concurrent crowdfunding campaigns.
Double Fine Adventure, for example, drew attention from both existing backers on the Kickstarter platform as well as people who joined Kickstarter to become backers. In fact, 70% of the project’s backers were new to the platform.
“If backers join the platform to contribute to a blockbuster product, there is a spillover effect that benefits other projects because these backers will also contribute to others on the platform,” said Wang.
That spillover effect especially applies to projects related to the blockbuster project.
“After backing the blockbuster, a backer’s attention is primarily on related projects because of the intent to find something similar to previous success,” said Wang.
The research also found that the spillover effect heavily depends on timing. A project launching just after a blockbuster will likely see more success than one that launches before a blockbuster debuts.
According to Wang, that’s the biggest takeaway for entrepreneurs and project creators. “Creators should look at whether there are blockbusters related to their own product, and then decide the right timing to launch,” he said.
Those that “piggyback” on the blockbuster’s launch “are likely to benefit from the increased backer participation and incoming new backers, and thus achieve superior funding performance,” according to the paper.
The researchers also looked at how platforms can help entrepreneurs by identifying and promoting blockbusters. They can leverage the blockbuster projects to boost participation on the platform and emphasize the content of the blockbuster to create opportunities for related projects that stand to benefit.
“Blockbusters have strong influences on platforms, but it is not always the case of ‘winner takes all,’” Wang said. “Blockbusters can create significant value to others through their spillover effects, and platforms should promote blockbusters for platform success.”
