"Does the product really arrive when I invest in Kickstarter?", Kickstarter publishes a full report investigating the failure rate

ByKuma Tai

In the major "Kickstarter" of the crowdfunding site where the creator publishes ideas and seeks investment, "reward" called "reward" is prepared for each contribution amount. Many of them are initial lots of products that are started when the target capital contribution amount is reached, etc. However, unlike mail order sales, it is "investment" to the last, so even though the project has been attained in some cases, the product does not arrive at hand A case also exists. What is the probability that such "Rewards" will not reach the shareholders, in the state of Pennsylvania, USAWharton SchoolA report that was researched has been released.

Kickstarter Fulfillment Report - Kickstarter
https://www.kickstarter.com/fulfillment

Delivery Rates on Kickstarter by Ethan R. Mollick :: SSRN
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2699251

In the state of Pennsylvania, USAWharton SchoolProfessor Ethan Morick received a request from Kickstarter and investigated how much investor is receiving the reward. Research is under the following conditions.

· Asked whether 45,6751 randomly chosen investors received rewards from invested projects
· An average of 7.2 investors were selected per project, and a total of 41,788 people (10.3%) obtained responses from investors
· Based on the total number of responses from investors, it is said that one person got a response for each of the 32 323 projects, which is 46.42% of all projects
· From April 2009 to May 2015 Target investment of 65326 Target project completed
· All projects gathered more than $ 1,000 (about 120,000 yen) of contributions, of which less than $ 250 (about 30,000 yen) targeted for 1, of which between $ 250 and $ 1,000 A project of ten thousand yen to approximately 120 thousand yen)
· Failure of the project includes those who responded that the investor "could not receive the reward" or "it was received but not received"
· The response rate is within the allowable range through all categories, and the possibility that the survey result is biased is low

◆ Result 1: 9% of Kickstarter projects can not ship rewards
Although it is said to be the core of this research, "Whether you can receive rewards if you contribute to the project", but as a result of the investigation, it was 9% of all the projects that failed to ship the reward promised to the investor . Also, 8% of the investment in all projects was used for failed projects, 7% of the investors said they received a different reward than what they wanted. 65% of the investors answered "We received the reward as we announced."

Professor Morrick said about this result, "Kickstarter's shareholders should know that one project fails in 10, 13% can receive refunds." In addition, Kickstarter automatically refunds funds for projects that did not reach the target capital contribution amount, but Morric's refund refers to the case where the reward has not yet arrived at the targeted investment achievement project. Also, since the systematic elements of Kickstarter have nothing to do with these failure rates, it is possible that the failure rate will be high on other platforms.

◆ Result 2: The failure rate is the same in every category
In this research, the project was counted as "failed" with three definitions "Broad (broad sense)" "Middle (middle)" "Narrow (narrow sense)". "Wide meaning" is a case where at least one investor answered the project as failed, "middle" answered that at least half of the investors answered "failed", almost "everyone in the narrow sense" answered that they were unsuccessful It is. The failure rate derived from these definitions seems to have seen no big change in any of the 15 categories of Kickstarter.


◆ Result 3: Projects with a target capital contribution of less than $ 1000 (approx. 120,000 yen) have a high failure rate
Professor Moric examined the failure rate of the project for each scale of the target investment amount, and found that the small project showed the highest failure rate. If you look at the graph below, you can see that the failure rate of projects under $ 1000 is as high as 13%. On the contrary, the project with the lowest failure rate was a project with less than $ 1000 and less than $ 5000 (about 620,000 yen).


◆ Result 4: There are "good failure" and "bad failure"
73% of the investors of the failed project answered "I want to invest in another project of the same producer", but 13% of the investors of the failed project want to "invest in another producer" He said that he replied. Professor Morick investigated the cause of this "good failure" and "bad failure", 13% of the investors of the failed project received refund or some compensation from the producer, 17% said "why the project Did you understand that you understood that it failed? Although the satisfaction level of the investors who failed as a whole was low, it means that 15 to 20% of cases where authors successfully controlled the failure were seen.


"Refund" and "Detailed explanation on failure" are the key, and if the producer can not make the project succeed by all means, it is best for Prof. Morick not to keep it secret from investors. "What did you do" "How was the investment money used?" "What was the decisive factor and the progress stopped" to the investor in detail, it was a failure after proper efforts If you can prove that it is possible, there is a possibility that the investor's understanding can be obtained. If there is any remaining funds remaining at that time, you can offer a refund.

When investing in Kickstarter, by referring to these data, the probability of becoming one of the worlds that increases the contribution ratio to successful projects and receives innovative products as soon as possible may be improved Hmm.