Thinking of crowdfunding your start-up? Then don鈥檛 make potential contributors feel guilty if they don鈥檛 cough up some cash. Instead, couch your pitches in language that makes clear that those investing in a project will be rewarded with freebies like T-shirts and discounted purchasing deals on the product when it hits the market.
Those are just two of the messages to emerge from a detailed linguistic analysis of tens of thousands of successful and unsuccessful pitches posted on the Kickstarter crowdfunding website during 2012.
After noticing that some projects fail to get funded even after attracting positive media attention at launch, researchers Tanushree Mitra and Eric Gilbert at Georgia Institute of Technology in Atlanta wondered if the way a pitch is written, rather than the inventiveness of the project or the quality of the video explaining the idea, play a role in hitting funding targets.
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What really got them interested was the vast disparity between the fate of a pitch for funding a videogame called Ninja Baseball and the pitch for the Pebble smartwatch. While the game sought $10,000 and got it only raised one-third of what it needed and, as Kickstarter is an all-or-nothing play, it got nothing. Yet Pebble sought $100,000 and has so far received $10 million, with $2.6 million of that coming in just three days.
鈥淲ith such huge discrepancies we wondered what kind of insights we could find,鈥� says Mitra. So they used data-mining software to download the pitches from 45,000 Kickstarter projects 鈥� 52 per cent of which got funded 鈥� and analysed 9 million phrases used to persuade would-be pledgers to part with their money.
I鈥檒l scratch your back
They compiled two lists: the top 100 words or short phrases that signalled a project would likely be funded and a top 100 suggesting it would not. Mitra says phrases suggesting strong 鈥渞eciprocity鈥� signalled successful funding. 鈥淭hose campaigns which follow the concept of reciprocity 鈥� that is, offer a gift in return for a pledge 鈥� generated the greatest amount of funding,鈥� says Gilbert.
On the downside, phrases suggesting the project would be in trouble if the pledger did not cough up, fared badly, with phrases beginning with 鈥渆ven a dollar鈥� often signalling funding failure 鈥� such as 鈥渆ven a dollar short鈥�, 鈥渆ven a dollar will鈥� and 鈥渆ven a dollar can鈥�. In their paper, which will be presented at a in Baltimore, Maryland, in mid-February, the researchers say this reads as unattractive 鈥済rovelling for money鈥�.
Last year Gilbert used a similar data-mining technique to uncover the secrets to gaining followers on Twitter .
Kickstarter, based in New York, has not yet digested the study, though a spokesman described the work as 鈥渢houghtful鈥�. The site is a tremendous success, collecting $480 million in cash pledges in 2013 alone from 3 million people.
Tom Walkinshaw, founder of nanosatellite start-up PocketQube of Glasgow, UK, which was and which now has four nanosatellites in Earth orbit, welcomed the research.
鈥淐rowdfunding at present is a bit like the internet in 1995. Everyone agrees it could be really game-changing, but there is a real lack of in-depth knowledge on why some campaigns work while others just fizzle out. This is very interesting research and could undoubtedly be beneficial to both crowdfunding hopefuls and new crowdfunding platforms,鈥� Walkinshaw says.
