The Road to Success for Digital Entrepreneurship: Evidence from Online Crowdfunding Market

Abstract

<p>The fierce competition in the crowdfunding market has resulted in a high failure rate. Due to their devoted dedication and efforts, many founders relaunch failed campaigns for a second attempt. Despite a great need for better understanding, campaign relaunch success is not well researched. To fill the research gap, this study theorizes and empirically documents how founders’ strategic changes may enhance campaign relaunch performance by influencing the probability of finding optimal solutions. The study examined 5,798 Kickstarter relaunched campaigns. Founders' salient strategic changes are empirically captured as how their campaign design deviates from past business practices. We found that the revision of the product/service prototype, the adjustment of fundraising targets, and the change in the project category have positive impacts on campaign relaunch performance. Yet, when the revision distance exceeds a certain threshold, the positive impact may be weakened or even lead to negative impacts. The findings further suggest that the above effects may be heterogeneous as the severity of prior failures varies.<br></p>