Proceedings of2020 the 53 53rdth Hawaii Hawaii International International Conference Conference on System on System Sciences Sciences | 2020 How to Manage Crowdfunded Projects: Empirical Evidence from a Comparative Study of Game Development Projects Shahla Ghobadi Leeds University Business School, The University of Leeds [email protected] Abstract the zeitgeist of modern entrepreneurship. Crowdfunding in its current form refers to open calls This study expands current understanding of the through Internet-based platforms such as Kickstarter crowdfunding phenomenon by explaining how and Indiegogo, asking a large number of dispersed crowdfunding initiatives that have succeeded in individuals to contribute small amounts of money hitting their financial target— referred to as towards financing a specific project [4-7]. Existing crowdfunded projects— can continue to succeed by delivering their promise within the schedule, budget, research on crowdfunding provides a useful and quality guidelines. The study develops foundation to appreciate the complexities of building propositions that elaborate the importance of campaigns that can succeed in attracting financial undertaking four broad strategies—namely, project support [6, 8-12]. Current discussions usually management, communication, community, and open describe their understanding of the success of a innovation— during crowdfunded projects. It then crowdfunding initiative with measures, such as the reports the results of an in-depth, comparative rate of pledging to the funding target and the number qualitative study of two exemplary game development projects to evaluate the applicability of of backers supporting the campaign [13-15]. The the propositions and create a better understanding of dominant research focus on how to succeed in raising their underlying concepts. The findings confirm the funds is not surprising, given that acquiring financial propositions by demonstrating how the two projects resource is an impactful and well-documented event. differed greatly in the use of strategies. Furthermore, Nonetheless, financing makes up just one facet of the the exploratory nature of the comparisons enriches longitudinal process that is expected to produce and the propositions by revealing new concepts that need deliver the promise of crowdfunding—usually a to be considered in the successful implementation of the identified strategies. product or service [16, 17]. A successful crowdfunding campaign that has received sufficient 1. Introduction financial support can still fail or produce poor outcomes by not being able to deliver its intended In 1885, Joseph Pulitzer launched a crowdfunding promise to backers within the schedule, budget, and campaign for the plinth that the Statue of Liberty still quality guidelines. Alas, these outcomes are not uncommon. Research and industry reports agree that stands on today, by asking the readers of his the life of crowdfunded projects is unpredictable, newspaper The New York World for donations. Way with at least half of new ventures failing within five back in 1713, a young Alexander Pope set out to years [18]. It is essential for the people who initiate a translate 15,693 lines of Homer's Greek poetry into crowdfunding initiative— usually referred to as English. In exchange for being listed in the early project owners—to think carefully about distinct edition of the book and the delight of helping to give challenges that their projects might face and consider birth to new creative work, 750 subscribers pledged strategic actions that can be implemented to help two gold guineas to support Pope’s effort. Crowdfunding is not a new phenomenon. overcome or prevent those challenges. Throughout history, it has been trumpeted as a This study contributes to a better understanding financial source of capital for those with influential of these dynamics by focusing on crowdfunding ideas but limited resources to implement them [1-3]. initiatives that have succeeded in hitting their However, it is relatively recently that advances in financial target during the fundraising stage, information and communication technologies (ICT) asking: How can they continue to succeed during have allowed crowdfunding to enter, and even shape, the development stage, by delivering their promise within the schedule, budget, and quality URI: https://hdl.handle.net/10125/64356 978-0-9981331-3-3 Page 4993 (CC BY-NC-ND 4.0) 2020 53th Hawaii International Conference on System Sciences guidelines? The study draws upon extant research on new expectations from backers to produce and organizational change [19] and crowdfunding to distribute significantly more rewards (e.g., new layers develop propositions that explain the importance of functionalities in the final product). While it makes making certain strategic choices during crowdfunded sense to use the extra funding to fulfill the new projects. It then evaluates the applicability of the requirements, the relationship between available propositions by conducting a qualitative study that funding and capabilities of a team of entrepreneurs is compares the exemplary cases of two game not necessarily a linear one. Often, it can be the case development projects—Shovel Knight and Clang— that managing the increased complexity of a large that had achieved incredible success in collecting project, regardless of the availability of funding, can financial support but had unfolded toward very be simply beyond the expectation, experience, and different development fates. expertise of a small team of entrepreneurs. Similarly, crowdfunded projects are usually open to embrace 2. Theoretical Background inevitable changes in project direction (e.g., being acquired by established companies). However, This section uses the socio-technical model of conflict might arise if the emerging path of the Leavitt [19] to create a narrative story that explains, project is very different from its original plans [25]. and then ties together, strategic choices that can be This can be particularly challenging due to the considered during a crowdfunded project. Leavitt’s complexity of managing the expectations of a large model has a long history of being used as a and dispersed group of stakeholders— here, backers. comprehensive and anchored in theory foundation for Collectively, such situations can decrease backers’ conceptualizing the critical aspects of product satisfaction with their initial investment as well as development [20]. Its application is consistent with their motivation in making subsequent contributions. the context of crowdfunded projects, aiming to Hence, crowdfunded projects need to place a advance a product or service. Leavitt’s model views strong emphasis on project management strategies product development as a multivariate system that that can strike a careful balance between the stability involves structure, technology, people, and tasks [19, of plan-driven methods and the flexibility of agile 21]. Structure covers organizational and institutional development methods. Scrum, for example, applies setting issues of the project. Technology includes the iterative delivery and its principles to achieve such application of tools, methods, and platforms used in balance [23, 26]. It opens rooms for flexibility by the project. People refers to key stakeholders that are allowing change requests to be created and approved affected by the outcomes of the project, and hence at any time during the project. It also maintains they are expected to have a voice in the development stability by creating a prioritized development process. Task represents the activities that need to be backlog and by making sure that all requirements pursued to advance the project and benefit the related to an ongoing sprint are frozen during that development performance. sprint. Such process, which allows project owners to be open to change but also careful to avoid unnecessary complexity, increases the chance of 2.1. Structure implementing a project that meets not only the budget specifications and delivery timelines but also A crowdfunding initiative, which has been the quality requirements. Subsequently, a better financially supported by the crowd, has found a development performance increases backers’ chance to begin the development process towards satisfaction with their investment and motives them implementing its promise. Managing crowdfunded to contribute to the project in the long run— both projects, however, is challenging. Such challenge is financially and intellectually. We thus propose: partly due to common difficulties that crowdfunded Proposition 1. Hybrid project management projects share with other types of projects, i.e., strategies, which blend plan-driven and agile project management risks, knowledge management methods, increase the chance of meeting budget risks [22, 23]. Additionally, crowdfunded projects specifications, delivery timelines, and quality have an extremely fluid and flexible nature that guidelines. encourages overpromising and under-delivering, Proposition 2. Hybrid project management bringing uncertainty and confusion into their strategies, which blend plan-driven and agile organizational structure [24]. For example, numerous methods, increase backers’ satisfaction with their high-profile controversies in the crowdfunding investment and the chance of making further industry (e.g., Godus) have emerged as a result of contributions. reaching funding goals many times over, generating Page 4994 2020 53th Hawaii International Conference