Technology of the week : Crowdfunding: Kickstarter vs.

The term crowdsourcing was introduced in an article from Jeff Howe (2006). Literally it means ‘sourcing out your activities to the crowd’. Tasks that were usually provided by a company, a couple of people or only one person, are outsourced to all kinds of people, the crowd. With crowdsourcing every individual can contribute to a project. The main purposes of crowdsourcing are finding solutions for existing problems and generating new ideas. The internet is an important component in this process. The type of crowdsourcing we’re going to focus on from on, is crowdfunding.


Kickstarter has mastered the platforms’ unique strategic challenges (getting pricing right, winner-take-all dynamics, the threat of envelopment), which resulted in a head start over their competition (Eisenmann et al., 2006). Kickstarter is an established platform since 2009 and is now one of the biggest crowdfunding platforms in the world where 1.9 billion dollars have been pledged to projects by 9.4 million people from all over the world. In the year 2013 around 3 million people invested 480 million US dollar in projects. These 3 million people come from 214 countries and territoria around the world and from seven continents (even Antarctica). 19911 projects were successfully financed that year. In the year 2014, 529 million US dollars were invested in projects.

Geldvoorelkaar is the biggest crowdfunding platform in the Netherlands. “This platform connects companies with money to companies that need money” (, 2013). provides an alternative to the traditional way of financing using banks. In 2010, two former bank managers developed the idea to start a crowdfunding platform and in 2011 this idea became reality. Due to the credit and banking crisis, the necessity of an new impuls in the market became important for further development. SMEs (Small and Medium-sized Enterprises) and starting entrepreneurs need capital to grow. In addition, the platform gives the community the opportunity to invest money and to contribute to social projects. Because of this combination of borrowing and investing, has financed more than 800 projects, with a total funding of more than 66 million euro (, 2015).


Below, a table summarizes the comparison analysis of the two crowdsourcing platforms.

Both crowdfunding platforms provide an open platform that brings together borrowers and investors.
Both crowdsourcing platforms are used by people or businesses that can’t get credit via traditional credit providers
Entry barriers in the industry are relatively low
Backers of a project can’t be rewarded with money or equity Investors receive a financial return from their investment
There are three rules that projects must meet to be able to get on the platform Everyone can fill an application for a credit request and the platform itself decides if the project will be published on the website
The platform charges a 5% fee on successfully funded projects The platform receives money in three ways.
The platform operates over the whole world The platform is only active in the Netherlands

What both the platforms could do better, is to put more effort in ‘Customer Relationship’. In order to accelerate its growth, it can secure the exclusive participation of users in the form of a commitment from them not to join rival platforms (Eisenmann et al., 2006).

Is there any future in crowdfunding?

We’re convinced that this technology will grow further in the near future. More people will become aware of the option of crowdfunding, e.g. we saw several crowdfunding projects in the newspapers from last week (Metro, 2015). Also the amount of scientific research about crowdfunding is increasing. People can read about how to successfully start a crowdfunding platform in Zvilichovsky’s article (2014). According to Zvilichovsky et al. (2014) positive network effects are created while project owners back other projects. By doing this also learning effects will occur, because they learn about the in and out’s of the platform. They also learn about how to define and present their own projects.


Howe, J. 2006. The Rise of Crowdsourcing. Wired Magazine 14(6).

Eisenmann, T., Parker, G., and Van Alstyne, M.W. 2006. ‘Strategies for two Sided Markets’. Harvard Business Review 84(10) 92 -101.

Eisenmann, T., Parker, G., and Van Alstyne, M.W. 2009. ‘Opening Platforms: How, When and Why’ in Platforms, Markets and Innovation, Gawer A. (ed.), Northamption, MA: Edward Elgar, pp. 131-162

Zvilichovsky, D., Inbar, Y., Barzilay, O. 2014. ‘Playing both sides of the market: success and reciprocity on crowdfunding platforms’ [online] Avaiable at: [Accessed: 25-09-2015]

Group 42


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