Risk and innovation balance in crowd funding new products

Chaoyang Song*, Jianxi Luo, Katja Hölttä-Otto, Warren Seering, Kevin Otto

*Corresponding author for this work

Research output: Chapter in Book/Report/Conference proceedingConference contributionScientificpeer-review

7 Citations (Scopus)

Abstract

Many have considered that innovation through new and small companies is a vital driver for sustainable economic growth. Recent growth in Web 2.0 demands small companies to further incorporate risk management while developing innovative products. How to balance risk and innovation during new product development becomes a priority for small companies to survive the competition. Yet, the approach is not likely similar to that employed by incumbent firms. This paper explores innovation versus risk for small companies using crowdfunding products as a proxy for analysis. A database with 127 consumer electronics, namely 3D printers and smart watches, are collected from Kickstarter and Indiegogo. The metric of Real-Win-Worth is adapted to provide a well-rounded assessment of the product's innovation, risk and other related business and engineering aspects. Our result suggests a preliminary framework of innovation and risk balance for crowdfunding NPD success. A statistical model is developed to correlate the amount of crowdfunding raised with 64% predictability. These results may contribute to better understand and balance risk and innovation in crowdfunding and small company contexts.

Original languageEnglish
Title of host publicationInternational Conference on Engineering Design ICED
Pages1-10
Number of pages10
Volume8
Publication statusPublished - 2015
MoE publication typeA4 Article in a conference publication

Keywords

  • Crowdfunding
  • Innovation
  • New product development
  • Risk management

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  • Cite this

    Song, C., Luo, J., Hölttä-Otto, K., Seering, W., & Otto, K. (2015). Risk and innovation balance in crowd funding new products. In International Conference on Engineering Design ICED (Vol. 8, pp. 1-10)