When you’re buying an unfinished product from someone crowdfunding their idea on the internet, trust matters — even more than actual skill.
According to new research from Binghamton University, your reputation as an entrepreneur matters even more than your capability of actually seeing the idea through to a finished product on crowdfunding sites like Kickstarter and Indiegogo.
We care more if someone will finish their idea than whether they can execute it
In the absence of using product reviews to weigh their decision, potential funders become much more interested in the ethics of a person. To test this, researchers recruited 300 participants to judge mock crowdfunding campaigns of varying complexity. They ranged from easy ideas like new types of photo albums to ideas requiring higher levels of expertise like a new kind of 3D printer.
As the complexity of a product increased, the researchers found that concern about the seller’s reputation increased, even as concern for the seller’s capabilities decreased. Even with highly complex products, people were more concerned about a seller’s reputation and opportunistic behaviors than their competence. In other words, people are more concerned whether or not someone will finish their innovative 3D printer idea than whether they can actually build a 3D printer.
“We found that people worry more about the seller’s honesty than whether the seller actually has the ability and knowledge to finish and deliver on the product,” Ali Alper Yayla, one of the study’s researchers, said. “People don’t want sellers to just take their money and run.”
Crowdfunders face the uncertainty of putting money into a project that may never be realized
As the study notes, “The project initiator can be faithful and ethical at the beginning of the project, but later due to the limitation of his/her capability, fails to meet the expectation, resulting in lower quality products, delivery delay, or even project cancellation.”
Potential funders want to know that their money is going to an idea that will not just stay an idea. They want to know you’re working in good faith.
If you want to get your idea crowdfunded, build a reputation as someone who does not let plans fall through.