Carolina Dalla Chiesa Erasmus University Rotterdam
Between isomorphism and differentiation: on reward-based crowdfunding platforms
A rapidly increasing number of entrepreneurial initiatives is undertaken nowadays through crowdfunding platforms, which provide a way to access financial resources for a wide range of activities (profitable and non-profitable). Crowdfunding is a growing phenomenon (Onnee & Renault, 2017) spread amongst approximately 1,250 websites worldwide that reached a transaction volume of US$ 34 billion by the end of 2015 (Massolution, 2016). It can also be understood as an alternative way of financing a project when compared to traditional funding institutions such as banks and government loans. The central difference between crowdfunding and traditional capital raising is the process of funding itself, which depends on a series of factors (Belleflamme, Lambert and Schwienbacher, 2014): (1) the crowd behavior, (2) the quality signals of the project and (3) the importance of the platform as a mediation between funders and proponents. Still in its infancy, the crowdfunding market is an under-regulated phenomenon (Mollick, 2014), with isolated attempts to create a set of rules that guide the various ways to fundraise economic activities. Therefore, this is a highly uncertain environment with low entry barriers for both projects’ proponents and entrepreneurs who create crowdfunding platforms. The characteristics of the latter are still overlooked by the literature (Belleflamme & Lambert, 2016), which tends to focus mostly on the success factors of projects and determinants of crowd participation. The nature of the work within such environment is also relatively unknown as well as the elements that guide the choices for specific business models. This paper aims at discussing the characteristics of the working environment within crowdfunding platforms through data gathered from five semi-structured interviews with founders of reward-based platforms (four based in Brazil and one in The Netherlands). The exploratory findings point out to a certain “institutional isomorphism” (DiMaggio & Powell, 1983) based on a mimetic behaviour of platforms due to an environment of high uncertainty and technological change. As a secondary result, it is also possible to observe an increasing use of sophisticated features in order to differentiate services among crowdfunding platforms, such as: curatorship, consultancy and post-campaign elements. As a third main finding, we observed that the values that guide the working culture at the platforms are used as signalling effort to set apart a “traditional business” to the “platform business”. Our research aims to contribute to unveil features and institutional characteristics that shape platform economies in the context of crowdfunding. Moreover, such emerging patterns are intrinsically related to business models choices and the way platforms choose to operate in a scenario of high uncertainty and increasing competition.
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