The Impact of Online Consumption Communities on Crowdfunding Success

Crowdfunding is an emerging model of finance whereby backers gather online to fund projects, event, causes or events. Online consumption communities OCC play an important role in removing temporal and spatial boundaries by allowing consumers to convene online over a shared consumption interest. In this paper, we try to understand the impact of online consumption community membership on crowdfunding project success. We build on the online consumption community literature to structure our argumentation and develop our hypotheses. We then apply sophisticated statistical models on a rich dataset integrated from multiple data sources to test our hypotheses. Our analysis suggests that online consumption community membership is significantly associated with higher likelihood of crowdfunding project success. We argue that this impact is due to increasing the project exposure to the right set of potential backers who share the same funding interest. This can circumvent the need for pre-existing backers who are able to pledge to the project and thus lead to more success. Our study provides an important extension to the crowdfunding body of knowledge through introducing the concept of online consumption community and testing its impact on crowdfunding success. The study also provides insightful practical implications for all parties in the crowdfunding ecosystem, including project creators, backers, and platform designers.