how to implement models of supply chain in crowdfunding technological projects

How to implement models of Supply Chain in crowdfunding Technological projects

Marina Mattera ([email protected]) & Raquel Ureña ([email protected]) Department of Economics and Finance

Universidad Europea, C/Tajo, s/n.28670-Villaviciosa de Odon-(Madrid) Spain

mailto:[email protected]

mailto:[email protected]


TABLE OF CONTENTS-INTRODUCTION -REVIEW OF KEY CONCEPTS

- SC- SCM- Crowdfunding

-DIFFERENCES BETWEEN STANDARD SUPPLY CHAIN AND CROWDFUNDED PROYECT SUPPLY CHAIN-COST AND SUCCESS FACTORS-CONCLUSIONS

Dr M. Mattera & Prof R. Ureña, R. – Management and Business Academy, International Business ConferenceJuly 3-5 London 2015



INTRODUCTION



INTRODUCTION

crowdfunding

Backers, funders or investors

stakeholders



KEY CONCEPTSSupply Chain SC



KEY CONCEPTSSupply Chain Management SC

The administration of upstream and downstream relationships with suppliers and customers adding value to the customer and the source (Christopher, 1999)



KEY CONCEPTS Crowdfunding

Crowdfunding is a relatively new form of financial source for entrepreneurs or companies seeking for funds to carry out their projects, obtaining such funding by drawing small contributions using internet platforms as intermediaries (Mollick 2013)




$84,007,433

$20,338,986

$18,439,086

$13,285,226$12,814,196




Crowdfunding financing models were classified according to what backers receive in exchange for providing funds. ● Reward based: Backers receive a tangible item or service.● Equity based: Backers receive a stake in the company.● Donation based: Usually used for charities.● Lending based: Backers are repaid.



DIFFERENCES BETWEEN STANDARD SC AND CROWDFUNDED SC

Tradicional SC model




Crowdfunding SC model

the lack of intermediation a minimum quantity of orders




Crowdfunding SC model benefits

The entrepreneur tests the market and obtains feedback from the prototype they show on their campaign.

They ensure they will have a minimum number of consumers prior to production.

Calculation of specific needs (raw material, hardware, etc)

Reduces cost of stock




Crowdfunding SC model disadvantages

Success that largely exceeds the original expectations creates an issue as the entrepreneur may not have the necessary resources and capacities to meet such a large demand

Entrepreneurs who failed to have an accurate plan and schedule of activities to be carried out in order to meet the demand they initially calculated and set as a goal for their campaign.



COST AND SUCCESS FACTORS

All or nothing? Success fee Fail fee Time limit

Kickstarter Yes 5%+(3-5%) N 60 days

Indiegogo No 4% (+3-5 %) 9%(+3-5%) No

RocketHub No 4 (+4) 8 (+4) No

Crowdfunding can be an interesting method to purchase technological products.

Individuals who are tech-advocates prefer to buy a unique product



COST AND SUCCESS FACTORS

A realistic planning (viability) Use adequate media (social media) to reach potential customers



CONCLUSIONS

SCM models must be used in Crowdfunding to be succesfulDifferences between SC and CSC must be considered. Use realistic production plan and deliveryAddional cost to the inicial prototype must be considered.


Mattera, M. & Ureña, R. – Management and Business Academy, International Business ConferenceJuly 3-5 London 2015

Technological categories in Kickstarter

16 Technology technology

341 Wearables technology/wearables

338 Robots technology/robots

52 Hardware technology/hardware

339 Sound technology/sound

334 DIY Electronics technology/diy electronics

337 Gadgets technology/gadgets

331 3D Printing technology/3d printing

335 Fabrication Tools technology/fabrication tools

336 Flight technology/flight

342 Web technology/web

332 Apps technology/apps

51 Software technology/software

35 Video Games games/videogames

272 Mobile Games games/mobile games

270 Gaming hardware games/gaming hardware

Data from Kickstarter



Money rised by successful campaigns in Kickstarter (Global and technological) in millions of USD





Number of successful technological projects in kickstarter




Money pledged by successful technological projects




38%

23%

Global success rate Technology success rate

Technology success is much smaller than global success




Different states of campaigns in Kickstarter• Live – Campaign is still active• Failed – The project failed to achieve it's funding goal• Canceled – The creator of the campaign cancels the project.• Suspended – Kickstarter cancels the campaign (They believe it to be a scam, product can't be

built, etc...)• Successful – The campaign was successful.




Failure of Technological products

Canceled Suspended

Tech 13,47% 0,48%

Platform 8,54% 0,21%

• Technology campaigns are twice as likely to be suspended (by the platform).

• Technology campaigns are almost twice as likely to be canceled (by the creator).




Campaign Pledged (USD) Backers Category

OUYA: A New Kind of Video Game Console 8.596.475 63.416 Gaming Hardware

Pono Music - Where Your Soul Rediscovers Music 6.225.355 18.220 Sound

Bring Reading Rainbow Back for Every Child, Everywhere! 5.408.917 105.857 Web

Torment: Tides of Numenera 4.188.927 74.405 Video Games

Project Eternity 3.986.929 73.986 Video Games

Mighty No. 9 3.845.171 67.226 Video Games

The Micro: The First Truly Consumer 3D Printer 3.401.361 11.855 3D Printing

Double Fine Adventure 3.336.372 87.142 Video Games

FORM 1: An affordable, professional 3D printer 2.945.885 2.068 Technology

Wasteland 2 2.933.252 61.290 Video Games

SCiO: Your Sixth Sense. A Pocket Molecular Sensor For All ! 2.762.572 12.958 Hardware

Homestuck Adventure Game 2.485.506 24.346 Video Games

Oculus Rift: Step Into the Game 2.437.430 9.522 Gaming Hardware

Sense: Know More. Sleep Better. 2.410.741 19.349 Technology

3Doodler: The World's First 3D Printing Pen 2.344.135 26.457 Hardware

ZANO - Autonomous. Intelligent. Swarming. Nano Drone. 2.335.120 12.075 Technology

HEX MMO Trading Card Game 2.278.255 17.765 Video Games

Camelot Unchained 2.232.933 14.873 Video Games

Planetary Annihilation - A Next Generation RTS 2.229.344 44.162 Video Games

Some of the most successful technological campaigns




• Less success than other kind of products• The incresase in cancellation rate suggests that creators change more their minds during the

funding campaign.• The increase in suspension rate suggests that Kickstarter finds more campaigns to be

unreliable.• It is not a problem of funding or number of backers. Numbers show that technological

products have more backers and pledge more money than non-technological products.• Cancellation rate can be related to the difficulty of delivering the goods, that would be with

the production, the supplies and other elements of the supply chain.• According to Mollick, products are usually delayed an average of 2,4 months. 75% of the

products are delivered late.• This delays are directly related to the size and complexity of projects.

how to implement models of supply chain in crowdfunding technological projects

Leadership & Management

business academy

models of supply chain

mattera prof

standard supply chain

key concepts supply

scm crowdfunding

key concepts sc

raquel urea