Introducing Crowdfunding to the Dutch Arts sector
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How to achieve diffusion and legitimacy of “Voor de Kunst”
P.Boon, University of Groningen
This version: Aug 24th, 2012 Master Thesis
P.B. (Paul) Boon (S1799304) University of Groningen
Faculty of Economy and Business
Department of Innovation Management and Strategy
Supervisors:
Preface
After having completed the curriculum of the Master S&I a while back, all that was left was the MSc. Thesis. Combining that with a challenging full time carrier and other distraction proved devastation for a quick wrap up. After loosing my focus on failed attempts progress stagnated. With the great help of dr. T.L.J. (Thijs) Broekhuizen (Coordinator of Master Thesis S&I) and some inspiring talks with dr. H. (Hendrik) Snijders (Assistant Professor) I found my way to a very fascinating topic - with a very hands on approach. After a (very) slow start this thesis really took off in the late spring and summer of 2012. To put it mildly, it has been a wearing journey and I’m glad (and relieved) I made it to the end.
As this thesis finds it genesis way back in the spring of 2010 I don’t only need to thank all my close friends, family and particularly Kim for their tremendous support, I especially need to thank them for their almost inexhaustible patience and confidence. Secondly, although at times cause of distraction, I would also like to thank Defacto for allowing and supporting me in pursuing a Masters degree next to my profession. Of course special thanks go out to all contributors. Perhaps even the Arts industry as a whole, because each approach on my part was enthusiastically replied to. These gratitude’s won’t be complete without also my thanks to my supervisors, in particularly prof. dr. W.A. (Wilfred) Dolfsma, who was a huge help in setting up and carry out the research and write this thesis.
Perilously, wrapping up this thesis has actually been very enjoying and fuelled an interest in doing research. With again a great thanks to all who have supported me,
Abstract
Ever shrinking public grants in the Dutch Arts sector are forcing the industry to find new ways of funding. With announced cutbacks up to 200 million euro and up to 40% less resources available from public funds, the industry is called upon to adopt innovative new methods of funding. Supporters of these reductions in public funding of the Dutch Arts sector point to other funding models in which the private sector plays a larger role. A novel funding method that could prove a suitable alternative could be Crowdfunding. Crowdfunding is an open call over the internet (i.e. to the Crowd) for the provision of financial resources. To help organize these calls and settle transactions so-called Crowdfunding Platforms emerge. Both Crowdfunding and a Crowdfunding Platform seem great innovations that could support (to some degree) Cultural Institutions in their quest for alternative ways of funding.
Considering research on Innovations a Crowdfunding Platform was identified as a ‘service innovation’ and several propositions were formed to investigate its potential adoption and legitimacy. These propositions reflect key traits of an innovation, the innovator and its environment that have a significant influence on the adoption and legitimacy of an innovation, in this case of a Crowdfunding Platform (i.e. Voordekunst) among Dutch Cultural Institutions.
Index
Preface ... Abstract ... Index... 1 Introduction ...
2 Crowdfunding in the Dutch arts sector ... 6
2.1 Cultural entrepreneurship ... 7
2.2 Crowdfunding ... 7
2.3 Crowdfunding Platforms... 8
3 Theoretical framework... 9
3.1 (Service) Innovations ... 9
3.2 The innovation of a Crowdfunding Platform ... 10
3.3 Diffusion and adoption of innovations ... 10
3.4 Legitimacy ... 14
3.5 Reputation ... 17
4 Methodology... 17
4.1 Unit of Analysis: Voordekunst ... 18
4.2 Target group interviews... 19
4.3 Propositions ... 19
5 Results ... 20
6 Discussion... 23
7 Conclusions and further research ... 27
7.1 Conclusions ... 27
7.2 Limitations and further research ... 28
References ... 30
Appendices... 33
I. Specific illustration of shrinking funds in the Dutch Arts industry... 34
II. Growth own revenues and distribution total benefits cultural organizations ... 35
III. Generic Legitimating Strategies: Legitimation Taxonomy ... 36
IV. Brief overview top receiving cultural project Amsterdam Fund for the Arts ... 37
V. Basis scheme Interview Questions ... 38
1
Introduction
In anticipation of furthermore cut backs on arts and culture with about 200 million euro Steenbergen (2011) is clear: This is not just a stern cutback, but it effectively implicates a transformation of the current system. The Dutch Arts sector needs to reform its funding methods, but it seems to be struggling to do so. Budgets have been economized for decades now and public grants are ever shrinking (see appendix I for a more specific illustration). Never before has so much funding for arts and culture been abruptly cut as today, and the damage will be unusually large (Lawson & Post, 2012). Many point thus to other models of funding. For example to the American model, where Arts and Culture depend heavily on private funding. Although this American model may have its flaws (e.g. the wealthy gain a greater influence) it seems inevitable that the Dutch cultural sector also needs to find additional sources of private funding.
The industry is slowly changing though. Over the last decade the revenues of artists and Cultural Institutions have increased noticeably and cultural entrepreneurship is more often than not a criterion to obtain public grants (Hermanides, 2010). To further facilitate that entrepreneurship an innovation like Crowdfunding could be provide an additional solution. Where patronages and sponsors have historically been the wealthy, with current social technologies the Crowd itself can become a collective patronage donating just a small amount per individual. Basically this means that the Crowd as a collective is funding a particular project. Having recognized this potential several (online) platforms have emerged that facilitate a marketplace that link projects and said patronages (The Economist, 2010). Not all with a specific focus on cultural projects, but it seems that especially such projects benefit the most from Crowdfunding (Lambert & Schwienbacher, 2010). Perhaps therefore the Amsterdam Fund for Arts started such a platform: ‘Voordekunst’ (For the Arts). Yet, there is no research done on the potential of this novel method of funding from an Innovation Research point of view. This paper will thus focus on the introduction of Crowdfunding as an innovation that is currently being utilized by the Amsterdam Fund for Arts.
However, to successfully make the most of an innovation is not that easy. In fact, most innovations will not become successful at all. Rogers (1995) gives us a great example of failing innovations by discussing the persistence of the familiar QWERTY keyboard. From 1873 up until today this type of keyboard has been dominating the market. It was particularly invented to slow down typists because traditional typewriters jammed when keys were struck to rapidly after each other. As typewriter technologies improved it was no longer necessary to slow down typists and already in 1932 a superior keyboard design was introduced that is twice as easy to learn and should allow us to type about twenty times faster. Based on the overwhelming advantages one might expect this new innovation would completely replace the inferior QWERTY keyboard. On the contrary, after almost 80 years, most machines today still use a QWERTY keyboard. This clearly depicts that innovations – although superior – are not always diffused and adopted rapidly. The extensive research done on the successes and failures of innovations gives us great insights in what the key features of a successful innovation are which will be discussed in section three. From this focal point this research will investigate the potential success (or imminent failure) of Crowdfunding in the Dutch arts sector.
adoption. Research suggests (Lambert & Schwienbacher, 2010) that Crowdfunding has great potential for projects that can utilize their own social network in gaining the necessary funding. Furthermore, Crowdfunding seems to stimulate cultural entrepreneurship among individual artist, see paragraph 2.1. But what about Cultural Institutions? They are also target group of a Crowdfunding Platform. As an institution they are already familiar with entrepreneurship and how to address their “fan” base with marketing schemes. How do they perceive the value Crowdfunding presents and does it have the necessary legitimacy to be adopted? To investigate this the main research question of this thesis is:
“How to achieve adoption and legitimacy of a Crowdfunding Platform among Dutch Cultural Institutions”
Most research on Crowdfunding is done looking at the supply side, i.e. investigations into why people contribute to a project thought Crowdfunding. As said above, this research will investigate the demand side of Crowdfunding (i.e. Cultural Institutions) where a Crowdfunding Platform could be seen as a service innovation to the Dutch arts sector. This should prove an interesting research for both existing platforms wanting to better grasp the demand side and also for Cultural Institutions (i.e. demand side) because this research will expose stimulating and discouraging characteristics of this service innovation. When all the significant characteristics are mapped, the potential value of Crowdfunding for all parties involved will hopefully be clear.
2
Crowdfunding in the Dutch arts sector
The Dutch arts sector is one of the most vibrant and most appreciated sectors in the Netherlands. Over 75% of the population thinks that arts and culture is an important part of society and over 85% think it is crucial in the development of children. To help sustain the cultural sector the Dutch government supports a basic cultural infrastructure that performs specific and vital functions nationwide, which are insufficiently supported by the market. In addition regional en local cultural projects are supported by provinces and municipalities.
Subsidized cultural projects obtain about 40% of their income (two billion euro) from own revenues, i.e. ticket sales, sponsoring, private funding, et cetera. Traditionally many cultural projects gain their revenues through Cultural Institutions, as is shown in the basic
value chain (see Figure 1) where Cultural Institutions act as an intermediary, from pre-funding to production, to distribution and finally consumption by the audience. Private contributions to the cultural sector (e.g. philanthropy and sponsorships) increased from 352 to 454 million euros between 2007 and 2009 (OC&W, 2011), see also appendix II. A continuous increase, but still arguably very modest. This is why the government tries to stimulate artists and Cultural Institutions to generate more private funding, for example
2.1
Cultural entrepreneurship
An entrepreneurial approach to projects in arts and culture is certainly not new. As Scott (2012) explored, the notion of cultural entrepreneurship dates back several decades and sums it up as individuals (or institution for that matter) creating new cultural products (e.g. songs, films, performances, etc.), preoccupy on producing an identity and social trajectory (i.e. ‘new taste maker’) and doing so without significant holding of funding. This means cultural entrepreneurs need to find innovative (bootstrap) ways to gain resources.
One of the biggest problems for a cultural entrepreneur in setting up cultural projects is thus capital acquisition, i.e. funding (Lounsbury and Glynn, 2001). Early stage start-up firms – such as (new) cultural projects - have limited options to find funding on the private equity market due to high uncertainty and the liability associated with 'newness' and 'smallness' (Cassar 2004; Harrison et al. 2004). Thus, (cultural) entrepreneurs frequently need to rely on the grace of public grants or their direct network of friends, family and foolhardy investors (Agrawal et al., 2011; Belleflame et al, 2010) to get started. Also the narrow amount of funding needed in most projects does not attract private investors (Wojciechowski, 2009). The needed seed capital exceeds the funding friends and family can provide or will eventually grow tired of providing. Unfortunately, the projects usually also lack sufficient legitimacy (or the required amount of funding is to low) to attract investors like business angels. This creates a notorious problem in entrepreneurship: the equity gap (Spelier, 2010). Although there is much debate about the exact boundaries of the gap, it is clear such a gap does exist. Public grants essentially fill that equity gap, but now that those grants are dwindling, cultural entrepreneurs need to find alternatives.
Spelier (2010) argues that Crowdfunding could be a way to fill in that gap. Crowdfunding bypasses the traditional value chain, allowing Cultural Institutions (and artists) to directly pre-fund their project from the (expected) audience, i.e. the Crowd. Besides the provision of funding, Crowdfunding can also provide secondary advantages such as more public attention and specific feedback on the project (Belleflame et al., 2010).
2.2
Crowdfunding
The concept of Crowdfunding finds its roots in the broader concept of Crowdsourcing, which describes the use of the “Crowd” to attain ideas, feedback and solutions through the internet in order to develop certain activities (Howe, 2006). Although novel in its contemporary design, the act of outsourcing a task dates back as far as 1714 when the British government offered a cash prize to anyone who could come up with an elegant way to determine the position of ships on the sea (The Economist, 2010). Crowdsourcing could prove as effective or more effective then own Research & Development when the problem is easy to delineate and broadcast, the knowledge required falls outside the firm, a large crowd can be reached, the solution is easy to evaluate and the information technology is low-cost and both used by the crowd and the agent (Afuah & Tucci, 2012). Traits that are also found in Crowdfunding.
Crowdfunding involves an open call, essentially through the Internet, for the provision of financial resources either in form of donation or in exchange for some form of reward and/or voting rights in order to support initiatives for specific purposes.
Their research furthermore suggests that Crowdfunding initiatives that are structured as non-profit projects tend to be more successful than other forms. Because of the reduced focus on profits they find it easier to attract funding. Organizing such an “open call” over the internet and handling all transactions can be a challenging feat for a Cultural Institution. Logically, for this reason so-called Crowdfunding Platforms have sprung up to aid organizers of project deploy and utilize crowdfunding.
2.3
Crowdfunding Platforms
As said, the point of Crowdfunding is to reach out to the “Crowd” to obtain funding. Different to current methods of private funding, this means the institution needs to find, persuade and govern not a limited group, but a very large crowd. Instead of seeking direct contact with the Crowd, the entrepreneurs can also use a Crowdfunding Platform. These IT and service innovations help facilitate the process of Crowdfunding by providing a online “marketplace” that link projects and sponsors (The Economist, 2010). Examples can be found in platforms such as Sellaband, TenPages, Kickstarter and Fundable. These platforms minimize the risk of missing real donations after collection is closed, but that is not all that they seem to accomplish. Wojciechowski (2009) also found that “success strongly depends on the ability to build an ad-hoc or persistent group of people sharing their believes and willing to support external institutions or individuals”. Supported by Lambert & Schwienbacher (2010) this suggests that the service that a Crowdfunding Platform provides plays a crucial role in the success of a project when it effectively allows the entrepreneur to obtain and nourish a social network. It should also be realized that in the early stages of a crowdfunding project the local social network is more likely to participate which is explained by the suggestion that these consist mainly of close social connections, which are characterized as family, friends and fans (Agrawal, Catalini & Goldfarb, 2010).
But why should the services of Crowdfunding Platform be so valuable? It should be so hard to deploy Crowdfunding on your own. One proposes a project, sets a funding goal and puts out an open call on the internet for private individuals to participate. After the closing-data the donations are collected, and if applicable rewards are distributed. But this can still be quite complex. Where do you showcase your project? Do you need to build a new website? How and where do you put out that ‘open call on the internet’? How do you moderate your social network online? And perhaps most challenging, how do you deal with collection donations from often as much as hundreds of sponsors? Let alone deal with possible legal issues. Basically the services of a Crowdfunding Platform are about providing a simple solution to those challenges and consequently making it easier to make use of Crowdfunding.
3
Theoretical framework
In section 2 the surroundings of the research question (i.e. the Dutch Cultural Institution) was discussed. For now, these surroundings will be discarded and this section will focus merely on the characteristics of a Crowdfunding Platform as an innovation as such. A review of related literature concerning the legitimacy and adoption of an innovation will form a theoretical framework which will be used to investigate the research question. In order to do this, the theoretical framework will be translated into practical propositions that will be used for the qualitative research which is implemented in sections 5 and 6. More on the used methodology see section 4.
3.1
(Service) Innovations
In the last several decades a lavishness attention to the workings of innovations has resulted in to an ambiguity (Garcia & Calantone, 2002) around the topic. From the creation, introduction until the success and/or failure of innovations; and from many disciplines such as new product development, marketing, creativity, engineering, et cetera - solid empirical research has led to a diverse set of normative strategies in coping with innovations. Perhaps the most fundamental distinction most authors seem to agree upon is innovation vs. invention. According to Garcia and Calantone (2002) and Fagerberg et al. (2005) there is a clear distinction: an invention is the initial manifestation of an idea for a new process or product, while an innovation is the actual introduction of that innovation to a market to end-users through adoption and diffusion. The OECD study (1991) perhaps best captures the essence of innovations:
‘Innovation’ is an iterative process initiated by the perception of a new market and/or new service opportunity for a (technology based) invention which leads to development, production, and marketing tasks striving for the commercial success of the invention.
Innovation is an ‘iterative process’ - this means that an innovation must include a first introduction of a new invention and the reintroduction of an improved invention (Garcia & Calantone, 2002), but should also be actually introduced to the market. That an innovation must incorporate something new is long clear (Schumpeter, 1939, Robertson 1971, Gatignon and Robertson, 1989). But what is “new”? Since an innovation needs to be brought to the market, the objective determination of an idea to be new is perhaps not even that relevant. Rogers (1995) states that “an innovation is an idea, practice or object that is perceived as new by an individual or other unit of adoption” which is reinforced by Wijnberg (2004) who states that an innovation is ”something new which is presented in such a way that the value will be determined by the selectors”. This is why the perceived newness of the innovation is more important. Kleinschmidt and Cooper (1991) also make the distinction if an innovation is new to the world, new to the firm, new technology and new product design. Garcia and Calantone (2002) build upon this and qualify innovations basically in three categories. First, radical innovations, that embodies “new technologies that results in a new market infrastructure”. This should lead to discontinuities on both a macro and micro level. Secondly, there are really new innovations where discontinuities should occur on either “marketing or technological macro basis in combination with a micro discontinuity” Thirdly, there are incremental innovations, which will not lead to macro discontinuities and effect marketing and/or technology on a micro perspective.
experienced or heterogeneous. Dolfsma (2004, 2011) identified intangibility and co-productions as the most fundamental of characteristics. From a management perspective products and services firms differ significantly (Dolfsma, 2004; Ford & Bowen, 2002), but from a customers point of view they may not fundamentally be that different. What makes customers buy something or engage in activities is never the product itself though, it is the utility; a solution to a problem (or need) they have (Drucker, 1974; Sawhney et al., 2004).
Literature on service innovations is still quite scarce, especially on the topic of diffusion. Perhaps this is because service innovations seem to follow more or less the same diffusion paths as traditional product innovations (Miles, 2005). The literature background in this research will therefore be based on existing research that is primarily applicable for product innovations and is accepted or dismissed on the estimation if it is applicable for service innovations. As discussed above, although research suggests there are similarities in diffusion paths between product and service innovations, many authors also agree that intrinsic traits of service innovations are cause for dissimilarities, such as uniqueness, intangible and co-produced. Additionally, the level of standardization displayed by a service innovation is an indication of the level of similarity it will display with product innovations (Tether et al., 2001).
3.2
The innovation of a Crowdfunding Platform
A Crowdfunding Platform is seen as an innovation because it introduces a new transaction method for projects to attain funding in a particular industry. It allows projects to directly and in advance collect funding from a large crowd. This is distinctly different than a limited group of traditional sponsors like philanthropies, sponsorships, patronages and investors. However, it is arguable that in essence the procedure remains the same. According to (among others) Rogers (1995) a service can be classified as new when the adopters perceive it as such. A Crowdfunding Platform incorporates existing technologies, such as social media and Crowdfunding, into a new service (i.e. product design) and could very much be seen as a new invention. Also, Kleinschmidt and Cooper (1991) make a distinction of an innovation being new in technology, product design, to the world and new to the firm. Crowdfunding Platforms have been around now for several years, but it is still seen as novel to the world, and certainly an innovation when it is introduced into a particular (homophilous) industry. So, in terms of Garcia and Calantone (2002) the introduction of Crowdfunding could be both on a macro basis (i.e. new to market) and micro basis (i.e. new to firms/clients) seen as new; thus being a really new innovation and an extension on existing services with new technology. Although this objective determination is very interesting, as said earlier, the perceived newness by the adopter is key (Rogers, 1995; Wijnberg, 2004) for its adoption. To further investigate the perceived newness the following proposition is formulated:
P1. A Crowdfunding Platform is seen as new to the market and firm.
3.3
Diffusion and adoption of innovations
background of this research also incorporates the concept of ‘legitimacy’, discussed by among others Maurer (1971) and Suchman (1995), see paragraph 3.4. In addition, Rogers’ (1995) construct has little attention for the characteristics of the innovator (i.e. the agent introducing the innovation). Literature (e.g. Terril, 1992; Ford and Bowen, 2002; Dolfsma, 2011) furthermore suggest that also the reputation of the innovator is key for the legitimacy and adoption of an innovation, see paragraph 3.5. The above main dynamics on the adoption of innovations will be discussed in the next sections in more detail.
3.3.1
Attributes of the innovation
An innovation itself has several key inherent attributes that determine the rate of adoption. Rogers’ (1995) respected review introduced five key attributes of an innovation (relative advantage, compatibility, complexity, trailability and observability) which determine between 49 and 87 percent of the variance in innovations' adoption rate. It is important to note that there is a disparity between these attributes as they are intrinsic to the innovation and in the way they are perceived by potential adopters (Moore and Benbasat, 2001). Especially in service innovations adaptors do not seem to respond to objective measures of these attributes, but rather to their perception of the traits (Bowen and Ford, 2002; Chase and Dasu, 2001).
Relative Advantage
An obvious asset an innovation should have is a clear and explicit benefit in effectiveness or cost-efficiency over competing alternatives (Marshall 1990; Rogers 1995). Customers engage foremost in activities because the utility is a solution to a problem or need (Drucker, 1974; Sawhney et al., 2004). This relative advantage can also be applicable to for example the status-seeking behaviour of the adopter (Rogers, 1995), which could be singular enough to be a key attribute of it own (Tornazky & Klein, 1982; Moore and Benbasat, 2001). For example, buying Apple products also has a degree creating value to it. Tornazky and Klein (1982) suggest furthermore that relative advantage can be divided into several more sub-attributes such as profitability, social benefits, time saved, et cetera. That the advantage, the value of an innovation, can be split up in several categories is evident, but holds no specific significance for this research. A general assessment of the relative advantage – in what category whatsoever – of an innovation should suffice for this research. Moreover, this attribute should prove just as potent for product innovations as for service innovations in their adoption. Without clear advantages over alternatives both product and service innovations will have trouble proving their value and thus hinder its adoption. Although one of the best predictors of the rate of adoption, relative advantage alone is also no guarantee for widespread adoption (Fitzgerald et al., 2002).
In this case, Crowdfunding presents a (novel) alternative for the need to generate funding. More particular, the need to generate funding from alternative sources because traditional sources become limited. This form of funding also presents secondary advantages in marketing; building an (involved) community around the project (or artist) (Agrawal et al., 2011), see also paragraphs 2.2 and 2.3. The solution a Crowdfunding Platform provides is thus – next to Crowdfunding - additional services to aid institutions and artists in utilizing Crowdfunding. The (perceived) relative advantages of a Crowdfunding Platform consequently should lie in the service itself, making Crowdfunding more accessible and manageable for adopters. Alternatively an adopter could also opt to deploy Crowdfunding on their own, neglecting the value of such a platform. To assess the potential adoption of this service innovation it is thus important to examine the relative advantage this alternative method of funding presents to their adopters with its services. Thus, to what degree do adopters perceive that the value of a Crowdfunding Platform lies in the service itself (i.e. product design), rather then for example the used technology of social media? Therefore the following proposition will be investigated:
Compatibility
Compatibility is about how the consumer perceives the new product or service as fitting to his or her lifestyle choices. When the product or service closely matches the individual’s needs, wants, beliefs, values, and consumption patterns, the innovation can be considered highly compatible with the consumer. Rogers (1995) states there are three compatibility issues at stake: 1) compatibility with values and beliefs, 2) compatibility with previously introduced ideas and 3) compatibility needs. The suggestion is that innovations incompatible with these three issues will not be adopted as rapidly as an innovation that is compatible. A topic closely bordering on the compatibility of an innovation is legitimacy, see also paragraph 3.4.
So, innovations are required to be compatible with the adopter. To what degree could a Crowdfunding Platform be seen as corresponding to their existing values and beliefs? Adopters may are already be known with generating funding from private individuals, such as sponsors and philanthropists. Is asking the “crowd” an alternative that thus can build on existing experiences of the adopter? Although some adopters may find the services of a Crowdfunding Platform incompatible with their values and past experiences it makes sense many actually do not have a problem with Crowdfunding, and consequentially a Crowdfunding Platform.
P3 Using Crowdfunding via a Crowdfunding Platform is seen as compatible with past experiences with generation funding.
Another indication Rogers (1995) mentions is the degree to which it meets a felt need. So, does Crowdfunding addresses a need for alternative funding, and are the services of a Crowdfunding Platform meeting that need?
P4. A Crowdfunding Platform addresses the need for alternative funding. Complexity
The degree to which an innovation is considered as difficult to understand and use is know as the complexity of the innovation. The more complex, the more negatively it influences the rate of adoption (among others, Cooper and Zmud, 1990). Rogers (1995) concurs that innovations that are simpler to understand are adopted more rapidly than innovations that require the adopter to develop new skills and understanding. He also notes that – although it slows down the adoption rate – it does not stop the innovation from being adopted.
The concept of Crowdfunding does not seem that complex. One proposes a project, sets a funding goal and puts out an open call on the internet for private individuals to participate. After the closing-data the donations are collected, and if applicable rewards are distributed. But this can still be quite complex. Where do you showcase your project? Do you need to build a new website? How and where do you put out that ‘open call on the internet’? How do you moderate your social network online? And perhaps most challenging, how do you deal with collection donations from often as much as hundreds of sponsors? Let alone deal with possible legal issues. Basically the services of a Crowdfunding Platform are about providing a simple solution to those challenges and consequently making it easier to make use of Crowdfunding. But still, the question is how complex the services of a Crowdfunding Platform are perceived by potential adopters?
P5. A Crowdfunding Platform is seen as a complex service. Trialability
Observability
The easier it is for individuals to observe the outcome of an innovation, the more likely they are to adopt it (Tornazky and Klein, 1982; Rogers, 1995). Visible (positive) results lower uncertainty and also stimulate peer discussions about the innovation and as a result stimulating the adoption rate of an innovation. Like trailability, observability also seems to be a problem for service innovations. Since the key characteristics of these innovations are that they are intangibility and co-produced (Dolfsma, 2004) thus invisible and unique. The perceived outcome of a certain service innovation may therefore differ among adopters. Also, this makes it difficult to evaluate alternatives without actually having experienced those (Voss, 1992). Nonetheless, a showcase of past outcomes of the service does seem to contribute (Kaganer et al., 2010). And, the more standardized a service is, the more accurate such a showcase will be. (Tether et al., 2001). Even so, this merely values the showcase of past results and is not a guaranteed successful (tailored) solution for the problem at hand. Although the outcome of the services of a Crowdfunding Platform should prove unique for each adopter, the service itself remains more or less the same, i.e. standardized. Hence, a showcase of past successes should prove an interesting strategy (Kaganer et al., 2010) to address the observability, and thus its adoption.
P6. A showcase of past outcomes allows the adopter to comprehend the solution a Crowdfunding Platform provides.
3.3.2
Attribute of the communication channels
Diffusion is a very social process. It involves at lot of communication between social entities who may or may not be closely linked together. Information asymmetries between these social entities are exchanged between so-called communication channels. Although the key dimension is the information being shared among the social systems (see paragraph 3.3.4) the communication channel used can be of enormous significance to. According to Rogers (1995), less complex innovations allow mass media to be used while more complex innovations should be communicated through more interpersonal contacts. According to Voss (1992) this presents problems for in particular service innovations, since these can inherently be assessed differently by previous users (i.e. uniqueness, see paragraph 3.1). Therefore, it seems that the most effective communication occurs among adopters that are alike in personal and social characteristics, i.e. homophilous. Unfortunately most participants in the diffusion of innovation are usually quite heterophilous. This phenomenon is amplified when looking at the fact that typical contributor to Crowdfunding projects are close social connections sharing their believes, like friends and families (Wojciechowski, 2009; Lambert & Schwienbacher, 2010; Agrawal, Catalini & Goldfarb, 2010). One of the characteristics of Crowdfunding is that the (cultural) entrepreneur can uphold and build their close social network, thus creating his/her own communication channel. Successfully adopting Crowdfunding for projects clearly entails a necessary degree of attention to the deployed communication channels. However, the adoption of a Crowdfunding Platform in the Dutch Arts sector is considered as an adoption among a more or less homophilous target group, rendering this attribute beyond the scope of this research. The influence of chosen communication channels by a Crowdfunding Platform is thus beyond the scope of this research.
3.3.3
Attribute of time
action, both for product and service innovations. The factor of time will thus not be further investigated is this research.
3.3.4
Attribute of the social systems
One of the characteristics most affecting the adoption rate of service innovations is social systems (Valente, 1996). Also discussed by Rogers (1995), this contains the norms of the social system and the level to which the communication structure is interrelated. This means that within social structure (e.g. networks) the diffusion of the innovation is made possible. Within the social system there are several key members that influence the diffusion: change agents, opinion leaders and followers. Change agents are essentially the first ambassadors of an innovation and are typically part of dissemination program by ‘spreading the news’ (Greenhalgh et al., 2004). These (usually) trained agents are selected for their homophilous character and credibility with the potential users of the innovation and help users in evaluating the innovation, i.e. adoption (Rogers, 1995). At this stage mainly opinion leaders are adopting the innovation. Sequentially, opinion leaders exert their influence through their authority and status in the social system, whereas peer opinion leaders exert their influence through their credibility among their peers (Locock et al. 2001; Fitzgerald et al. 2002). When people find out about new innovations their information sources can be measured according to four levels of credibility: 1) No credibility (e.g. Advertisement), 2) Plausible credibility (e.g. peer recommendation), 3) Indirect Experience (e.g. peer experiences) and the strongest: 4) Personal experience (Thiriot & Kant, 2008). The role of the social system and the levels of credibility are especially for service innovations important because of their inherent intangibility characteristics, such as the fact that a service cannot be experienced up front.
Possible adopters of a Crowdfunding Platform are usually more or less homophilous in their beliefs and values, thus communication among this social group is more likely to be effective (Rogers, 1995). For example, Sellaband targets music lovers and TenPages targets authors. This provides for a strong social system that can facilitate the diffusion of a Crowdfunding Platform. It could use existing opinion leaders to provide information and advice about their new service innovation. On the other hand there are change agents outside the social system. The decision to adopt or reject the service innovation a Crowdfunding Platform provides can be made by individual adopters on their own, as a collective within the social structure or by institutions considered an authority in the social system. Nonetheless, using Crowdfunding to fund a project demands a certain autonomous approach, addressing merely a social system – although probably still homophilous – part of a very close network (i.e. fans, friends, past audiences, et cetera). Such a narrow approach could render the social system of an adopter de facto ineffective. This conflicting inherent characteristic of this innovation could interfere with the suggested workings of service innovations in general. The social system could therefore prove less important in the adoption of a Crowdfunding Platform, than for service innovations in general:
P7. The social system of the target group is not pertinent for adopting a Crowdfunding Platform.
3.4
Legitimacy
“Legitimacy is a generalized perception or assumption that the actions of an entity are desirable, proper or appropriate within a socially constructed system of norms, values, beliefs and definitions”
Suchman (1995) suggests there are three general forms of legitimacy: pragmatic, moral and cognitive. A similar approach can be found in the research of Aldrich and Fiol (1994), who recognized two forms: cognitive and socio-political. In both classifications the cognitive form is more or less similar: it concerns the spread of knowledge about a new venture, focus on the understanding (cognition) and taken-for-grandness of the innovation. The socio-political form focuses on the acceptance of the innovation being appropriate and right. Here Suchman (1995) makes a further distinction by identifying a difference between self interest (pragmatic) and a pro-social logic (moral). Later, Kaganer et al. (2010) complemented the three forms of Suchman (1995) with a regulative form of legitimacy. This involves setting up innovations in accordance with the relevant legal (and quasi-legal) rules and regulations. Nevertheless, these authors fundamentally propose the same: legitimacy is about spreading knowledge and understanding of a novel product/service and the acceptance of an innovation by involved interest groups.
Further exploring the mechanics of legitimacy and its behaviour towards innovations Kaganer et al. (2010) compiled - upon a number of case studies (Munir and Phillips, 2005; Suddaby and Greenwood, 2005) and conceptual frameworks (Aldrich and Fiol, 1994; Suchman, 1995) - a list of generic legitimacy strategies as seen in figure 2 (see appendix III for more detail). These dynamics are specific to IT innovations and more comprehensive then the generic strategies from Suchman (1995) and will therefore be used – when applicable – to value the legitimacy policies of a Crowdfunding Platform.
Pragmatic Legitimacy Cognitive Legitimacy • Respond to needs – meet the substantive needs of various
audiences (i.e., respond to client tastes). Demonstrate results.
• Advertise product – persuade constituents to value the innovation offerings
• Co-opt constituents – build alliances with potential constituents; highlight (exaggerate) the extent of constituent participation in the innovation
• Build reputation – trade on the organization’s strong reputation in related activities
• Develop legitimacy by organizing collective marketing and lobbying efforts
• Mimic standards - mimic most prominent and secure entities in the field
• Formalize operations – codify informal procedures
• Professionalize operations – link activities to external definitions of authority and competence
• Seek certification
• Establish and promote new standards and models
• Develop knowledge by promoting activity through third-party actors
Normative Legitimacy Regulative Legitimacy • Produce proper outcomes – produce concrete meritorious
outcomes
• Embed in institutions – embed new practices in established institutions (e.g., through cooptation of respected entities) • Offer symbolic displays – portray outputs, procedures, and
structures as conforming to moral norms
• Signal that the new practice operates in accord with relevant laws and regulations.
Cognitive dynamics
This type of legitimacy deals with the level of understanding of an innovation or venture by the social systems. Do social audiences comprehend the service that a Crowdfunding Platform delivers, and to what the degree is the service ‘taken-for-granted’? Kaganer et al. (2010) concluded that the latter generally lie ‘beyond the realm of strategic action’ and thus focus on strategies concerning comprehensibility. Strategies most used to address the cognitive dynamics are:
C7: “Describe positive market responds to the innovation”
C1: “Explicitly explain key features, attributes, and usage conditions of the innovation”
C3: “Describe characteristics of the innovation that are in alignment with current best practices”
This attribute seems to be equivalent to Rogers (1995) complexity issues (see proposition 5). Yet, rather than looking at the level of complexity of the service innovation this attribute investigates whether or not a potential adopter comprehends the services a Crowdfunding Platform provides. Due to the intrinsic traits of service innovations (i.e. trailability and observability) it would be harder to comprehend the workings and value of such an innovation. So, do adopters understand the services a Crowdfunding Platform provides?
P8: The services a Crowdfunding Platform provides are hard to comprehend.
Pragmatic dynamics
This type of legitimacy deals with the desirability of the innovation, the assessment of a Crowdfunding Platform’s direct expected value. This dynamic combines the relative advantage of the service with the compatibility to the adopter. Interesting to notice is that the key strategies Kaganer et al. (2010) found are value-related justifications. Building pragmatic legitimacy is also about influence and dispositional legitimacy (Rogers, 1995), where alliance strategies are important. Kaganer et al. (2010) do present several strategies concerning these alliance-related dynamics, but these are closer related to the reputation concepts which are isolated later and thus will be discussed later on. Due to the intrinsic characteristics of service innovations these kind of innovation are hard to try out in advance. To address this aspect Kaganer et al. (2010) also found several success-story strategies which are vital for building legitimacy for IT innovations, building among others on Currie (2004) and Wang & Swanson (2007). Strategies most used to address the pragmatic dynamics are: P1: “Explain how the innovation improves the quality of the utility in an adopter organization”
P14: “Emphasize the entrepreneurs’ strong reputation in the innovation domain and related areas” P5: “Explain how the innovation improves operational performance of an adopter organization”
Looking at potential adopters of a Crowdfunding Platform, their homophilous character could be challenged from a desirability point of view. The intrinsic traits of a service innovation (uniqueness and co-produced) could challenge the standardization level of the services a Crowdfunding Platform delivers and consequentially challenges its desirability to the manifestly heterophilous needs of adopters. The degree of standardized services a Crowdfunding Platform intrinsically provides makes it more difficult to specifically communicate its value – thus its desirability – to specific heterophilous groups among their adopters (i.e. Cultural Institutions). Refining existing literature, this means the level of standardization could cause desirability issues because it influences the level of impartiality of potential adopters. To investigate the desirability of the value a Crowdfunding Platform provides the following proposition is formulated:
P9: A Crowdfunding Platform does not showcase a value that is specifically desired by the adopter.
Normative dynamics
This type of legitimacy is based primarily on the `altruistic pro-social logic of promoting societal justice and welfare’, Kaganer et al. (2010). This dynamic resembles the earlier discussed compatibility (Rogers, 1995), but rather than reflecting the values and beliefs of potential adopters, the normative dynamics deals with if the service of a Crowdfunding Platform is viewed as “the right thing to do” from regulative or social-political viewpoint. This is why normative, or moral, legitimacy is more complicated to accomplish through strategic manipulations than earlier discussed pragmatic or cognitive legitimacy. Nonetheless, the research of Kaganer et al. (2010) did find strategies aimed at achieving a moral base of the innovation’s legitimacy.
Thus, this dynamic does not deal with the norms of potential adopters of a Crowdfunding Platform, but with the norms existing social-political environment. Addressing a whole new group of possible sponsors, i.e. directly to private individuals as the crowd, instead of established sponsors such as private companies could be considered as not appropriate. So, to what degree do adopters feel a lack in normative legitimacy from their environment?
P10: A Crowdfunding Platform is not considered “the right thing to do”.
Regulative dynamics
This type of legitimacy deals with setting up the innovation in accordance with the relevant legal (and quasi-legal) rules and regulations existing in the particular industry (Scott, 2001). Kaganer et al. (2010) found one strategy pursued by IT vendors:
R1: “Stress compliance with legal and quasi-legal rules and regulations”.
So, to what degree do potential adopters feel that using a Crowdfunding Platform is or is not in accordance with legal rules and regulations? It would be save to assume that if it is clear to an adopter that the particular Crowdfunding Platform is not in accordance with the relevant legal rules and regulations it will not be adopted. Thus this dynamic will therefore not be further investigated in this research.
3.5
Reputation
Research also points out that the agents reputation is also a key factor in the successful adoption of an innovation and managing the legitimacy of an innovation (Terril, 1992; Ford and Bowen, 2002; Dolfsma, 2011). Adopters rely – besides information about the innovation itself – on the firm’s reputation when evaluation a new service (Grossman & Shapiro, 1988, De Branteni, 1989). Especially when the quality of services cannot be assed prior (i.e. experience goods, see Nelson, 1974) or even after (i.e. credence goods, see Darby & Kami, 1973) experiencing it, customers basically depend on the judgment of others, i.e. peer and expert selection (Dolfsma, 2011). This essentially means that Rogers’ (1995) social systems (see paragraph 3.3.4) transcend the innovation characteristics and also apply to the firms reputation in reducing the uncertainty surrounding the value of an service innovation (Kollock, 1994). Kaganer et al. (2010) already signalled the importance of the firm’s reputations in their framework (see previous paragraph).
Due to the nature of a Crowdfunding Platform (i.e. being a service, see paragraph 2.3) potential clients need to rely in part on its reputation to predict the quality of the service.
P11: A Crowdfunding Platform that cannot build upon a clear, good en perhaps existing reputation will be adopted less quickly.
4
Methodology
research is usually explored more deeply which leads to more adequate results (Zanoni, 2005). In an ideal situation this research would like to do both an extensive quantitative and qualitative research, but given the magnitude of such an approach and the limited time available this research is limited to the qualitative research. To apply a certain structure in this case study the five components in research design from Yin (2003) are applied:
I. Research Question(s): This is set out in the introduction;
II. Propositions: As part of a literature review these have been formulated in section 3. III. Unit of analysis: In this case study the Crowdfunding Platform Voordekunst, see section 4.1. IV. Linking data to the propositions: This is done in section 5 where the results are presented
V. Interpretation of the findings: This is done in section 6 where the results are discussed.
To determine in what way (consciously or not) the unit of analysis could achieve legitimacy and adoption of its service innovation two types of data were collected: the theoretical framework deducted from the literature research and the interviews conducted among potential adopters. The core of the theoretical framework particularly found Rogers’ (1995) work on diffusion of innovation a good starting point and Kaganer et al. (2010) framework on legitimacy strategies who have elaborated on Suchman’s (1995) work very valuable. For the qualitative data collection focused interviews with stakeholders (Flick, 2009) are made use of. To achieve a non-directive state several forms of questions were used. The interviews started with some introductory and unstructured questions about the case and stakeholder. Then some semi-structured questions derived form the propositions (see appendix V) followed in which the response was left open. Finally the respondents were presented with structured questions in which the issue (i.e. the propositions) were predefined in order to assess to what extend the respondent agrees or disagrees with the proposition.
4.1
Unit of Analysis: Voordekunst
In 2010 Voordekunst started out as the first Crowdfunding Platform for the Dutch Arts industry. Launched by the Amsterdam Funds for Arts (AFK) it gives substance to one of their key objectives: to stimulate cultural entrepreneurship. Since 1 July 2011 Voordekunst is an independent foundation. The platform facilitates artists, creatives and organizations who seek funding for their projects. The platform offers a new relationship between artists, individuals, companies, public and private funds to increase support for the arts. In 2011 a total of 45 successful projects were funded after using Voordekunst. In total, over € 0.5 million was raised and 3322 sponsors contributed to art projects (AFK, 2011). In 2011 it also successfully attracted partners such as ING, the Foundation “Doen” and the Brabants Knowledge Centre for Arts- and Culture (BKKC). Voordekunst is thus a platform where cultural projects find a mix of public grants and funds from the Crowd. Slowly expanding with other subsidizers and partners its ambition is to become a national Crowdfunding Platform for cultural projects.
As unit of analysis Voordekunst is seen as an (service) innovation and more specific an innovation to the arts industry. On Voordekunst individual artists and Cultural Institutions place their cultural projects for everyone to see. The two key factors of influence are the amount of cultural entrepreneurship the project can put in and their existing social network which they can use to utilize Crowdfunding. Once a project is approved Voordekunst guides the project in utilizing three types of partners:
• Public partners: Public institution that regulates public cultural grants. Among others they consist of the national government, provinces, municipalities and their funds. At this moment Voordekunst is working together with the AFK, BKKC and Cultuur-Ondernemen.
• The Crowd: The general public. From business angels, philanthropists to the so-called Friends, Family and Fools - these private individuals contribute by means of Crowdfunding to a project.
Apart from supporting with funding, Voordekunst also seems to contribute commercial skills, experience, business know-how and contacts, perhaps even playing a hands-on role in the project through its public and private partners. In traditional capital venturing this closely resembles so called ‘business angels’ (Mason and Harrison, 1995; Avdeitchikova et al., 2008). However, since the focus of this research is on the working of Voordekunst as a Crowdfunding Platform, rather than a ‘business angel’ these other types of support to a project will be discarded in this research.
4.2
Target group interviews
To determine in what way (consciously or not) the unit of analysis could achieve legitimacy and adoption of its service innovation a qualitative data collection will take place by means of focused interviews with several stakeholders (Flick, 2009). These stakeholders, the target group of these interviews – will be cultural organizations and organizers of past cultural projects. Cultural projects have been selected from those who have been granted a public grant from the Basic Grant Scheme of the Amsterdam Fund for the Arts in 2011. This scheme is intended for five categories of cultural project: Presentations & Events, Fine art projects, Film & Media Arts, Music & Musicals and Theatre, Dance & Arts. A brief overview of the top receiving projects in 2011 is presented in appendix IV.
These organizations were picked arbitrarily from the five categories resulting into six usable contributions from Cultural Institutions. These contributions were made by commercial, creative or financial directors that are responsible for fundraising. Additionally two authority organizations in this industry (i.e. opinion leaders) have contributed with their view on the Crowdfunding Platform and the determined propositions. At the request of the eight interviewees their contributions are included anonymously. Given the small size of the number of respondents, the possible disparity between categories of contributors is discarded.
4.3
Propositions
In section 3 the concepts of diffusion of innovations have been discussed, settling in particular around the concepts of Rogers (1995), Suchman (1995), Kaganer et al. (2010) and Dolfsma (2011) which have led to several practical propositions by which the unit of analysis (i.e. Voordekunst) will be investigated. Summarizing section 3 and after the introduction of the unit of analyses these propositions are converted into:
P1. Voordekunst is seen as new to the Dutch Arts Sector;
P2. The relative advantage of a Voordekunst is found in the service itself;
P3. Using CF via a CFP is seen as compatible with past experiences with generation funding form; P4. Voordekunst addresses the need for alternative funding;
P5. Voordekunst is seen as a complex service;
P6. A showcase of past outcomes allows the adopter to comprehend the solution Voordekunst provides; P7. The social system of the Cultural Institution is not pertinent for adopting Voordekunst;
P8: The services Voordekunst provides are hard to comprehend;
P9: Voordekunst does not showcase a value that is specifically desired by the adopter; P10: Voordekunst is not considered “the right thing to do”.;
P11: If Voordekunst cannot build upon a clear, good en perhaps existing reputation it will be adopted less quickly.
5
Results
In this section the contributions from the interviews will be presented, subsequently following the propositions (see paragraph 4.3) one by one. Besides specific questions about the propositions, some general introductory questions were asked. These questions are referenced to with their corresponding annotation Q1, Q2, etc. in appendix V. The focus will be on the responses of the cultural organizations and when applicable the contributions of the two authority organizations will be added as an outside reflection. When specifically referencing or quoting an interviewee the corresponding characters in appendix VI (i.e. A, B, C, D, X and Y) will be used, where the latter two refer to the authority organizations. When a ratio is applicable regarding to the substantive contributions they will be represented as (7/8), meaning that 7 out of 8 respondents support a specific statement. In case the ratio is like (n/6) the responses of the two authority organizations were left out. On average budgets of the six Cultural Institutions consist of about 60% of public grants and all respondents evidently feel that these are under pressure. Without exception every respondent is exploring alternative ways of funding (6/6) and looking at or applying sponsoring (6/6), friends-of-clubs (5/6) or contributions from their close network (4/6). But to what degree do they see Crowdfunding as a suitable alternative? The next segments will present the response on the interviewees on the propositions.
P1: Voordekunst is seen as new to the Dutch Arts Sector
As discussed in paragraph 3.1 the first proposition (P1) is about assessing the newness of the innovation, i.e. Crowdfunding and subsequently a Crowdfunding Platform like Voordekunst. Respondents concur unanimously that this innovative method of funding is new to their industry, although many (Q8, 6/8) see it as a logical, incremental next step. Voordekunst, as a Crowdfunding Platform, is seen as new to the industry (Q12, 8/8) and is a new method of funding to their organization (Q9, 5/6) that makes use of new technologies (A & B) and new product design (E & F). “Not a few sponsors that donate a large sum, but a lot of sponsors that donate a small sum”, (E). Yet, responses on the perceived newness also show that a comparison with existing methods, such as sponsoring or patronages (Q8, 4/8), is easily made. This results in a perception (4/6) that Crowdfunding itself is seen as an incremental reinvention of existing methods of funding and is certainly no ‘game-changer’ that will replace existing methods.
P2. The relative advantage of a Voordekunst is found in the service itself.
The primary service of Voordekunst is to facilitate and assist organizations to apply Crowdfunding. All respondents agree with the statement (Q18) that Voordekunst indeed provides such a service and that it should present an advantage over alternatives, such as deploying Crowdfunding yourself. But they also display doubts if such a service is desirable by Cultural Institutions. Most suggest that this service might be to restricting for Cultural Institution (6/8) or that their projects will get lost in the abundance of projects on such a platform (4/6). More on the desirability of these services is presented at proposition 9.
P3. A CFP is seen as compatible with past experiences with generation funding form.
As already presented at P1, it is clear that respondents can quickly see a comparison with funding methods they are familiar with like sponsoring and patronage. Two respondents (D & E) even suggest it could ultimately be seen as selling the end product (i.e. tickets or a cd) up front. Most respondents (5/6) see a logical compatibility of a Crowdfunding Platform with their existing experiences. For example, it is felt that dealing with Crowdfunding or traditional private sponsors is essentially not that different, beside the volume of sponsors. Although it is recognized the latter could present additional difficulties.
P4. Crowdfunding via Voordekunst addresses the need for alternative funding.
and Q4 it is clear that these organizations see their public grants shrinking (7/8), yet there is no unambiguous indication that they are above average extra exploring alternative forms of funding (Q5, 1/6). One respondent strongly advocates that Crowdfunding must not be seen as a “invitation for less public grants” (C) but it could form an alternative for the ever shrinking public grants, the majority focus more on cost savings (E & F), generating more revenues (B, D, E, X & F) or just going by with less (F). Nonetheless, it can’t be ignored that all respondents acknowledge they need to find alternative methods of funding to maintain their current activities.
P5. Voordekunst is seen as a complex service.
As Cooper and Zmud (1990) stated, the more complex a particularly innovation is, the less easy it will prove to be adopted. The respondents are divided in their opinion if Crowdfunding itself should be considered a complex method. Two (A & E) see Crowdfunding as a more complex method than traditional methods, where three (B, D & Y) are more subtle saying that it depends on the size and type of the project. Projects with a limited objective (B) should be less complex, but still there will be more to it than meets the eye (D & E). Nonetheless, three (C, F & X) respondents think applying Crowdfunding won’t be more complex than existing funding methods. All respondents agree that Voordekunst (Q18) reduces the complexity of using Crowdfunding. It is also clearly noted that most respondents (6/8) would still opt to adopt Crowdfunding on their own (B, D, Y & F), or at least in some cases (A & E). They substantiate this with their perception that their organisation has the necessary means and knowledge to deploy Crowdfunding on their own.
Four respondents (4/8, A, B, X & F) did not find the services of Voordekunst to be complex (Q19), among those four are both authority organizations. So authority figures seem to believe and advocate it is not a complex service, whilst most institutions actually do find it to be complex (4/6). Looking closer at the answers of those who found Voordekunst still complex it is clear that at least three (D, E & F) have issues comprehending the services offered, not necessarily with the level of complexity. The issue of comprehending the services will be presented at proposition 8. Notably, respondent C finds the service of Voordekunst complex because it seems to be tailored for individual artists instead of Cultural Institution. For example, an institution would like to showcase their projects in a different way then independent artist. More on this is presented at proposition 9. P6. A showcase of past outcomes allows the adopter to comprehend the solution provided.
A difficulty with service innovations is that they cannot be tried or experienced in advance, as discussed in paragraph 3.3.1. According to Kaganer et al. (2010) a showcase of past outcomes of that service would counteract this. This topic proved challenging, because inherently a Crowdfunding Platform is about showcasing projects, their progress and thus their outcomes to interest groups. Two (B & X) find it decisive that there is a showcase that acts as a best practice for the industry. Although others concur that a best practice would contribute (A, D, F & Y), it certainly is not essential for them. These results also show that respondents feel that the current showcases on Voordekunst do not represent their type of organizations and are more aligned with individual artists.
P7. The social system of Cultural Institution is not pertinent for adopting Voordekunst.
P8: The services Voordekunst provides are hard to comprehend.
Different to the complexity (P5), this proposition basically investigates to what degree the respondents feel they comprehend the services Voordekunst provides. Almost all respondents feel they have a clear understanding of the possibilities of Crowdfunding and how a Crowdfunding Platform provides an added value. Yet, regardless the complexity, only three respondents (B, D & Y) are confident they clearly understand the services Voordekunst provides and the remaining respondent (5/8) are at the least pessimistic about their actual understanding of the services provided. This is again partly due to the fact is currently mostly showcase outcomes and best practised of individual artists, not Cultural Institutions.
P9: Voordekunst does not showcase a value that is specifically desired by the adopter.
Rather then establishing that the innovation has a relative advantage (P2) over alternatives, this proposition looked at the desirability of that added value. The respondents are pretty much clear about one thing: additionally funding is always beloved. Noticeable, one respondent (D) undoubtedly sees a limited sustainable potential for Crowdfunding and would like to “save” its potential for desperate times when they need it. This limited potential is confirmed by others (C, D, F & Y) and could essentially discourage their adoption of a Crowdfunding Platform. All institutions (6/6) reckon that (one-of) projects from independent artists probably find it easier to collect funding through a Crowdfunding Platform like Voordekunst. Since their supporters – usually their close network – are probably still enthusiastic and willing to contribute. Respondents feel, institutions that need structural funding to realize its activity would quickly tire their supporters with their call for contributions (C, D, F & Y). Nonetheless, most (7/8) recognize that Voordekunst does showcase a desired value in guiding project in the use of Crowdfunding. However, most indicate that Voordekunst actually falls short providing the necessary value for Cultural Institutions to adopt the platform (6/8). Not addressing specific needs of Cultural Institutions, five respondents (B, D, E, F & Y) think they would be better of deploying Crowdfunding themselves. They fear that their projects will be hidden on a broader platform or that their target group won’t find their way to it. They also think they cannot put their own know-how into the Crowdfunding project as much as they would like. Still, most (7/8) realize that Voordekunst also presents a desired effect of publicity and cross-pollination between audiences, which would be harder to achieve on your own. While most respondents (6/8) see that Crowdfunding has clear advantages with regard to involving and engaging (new) supporters, it is also apparent that they doubt whether they not better deploy Crowdfunding themselves then to use a platform like Voordekunst. This undoubtedly challenges the desirability of the value of a Crowdfunding Platform such as Voordekunst to Cultural Organizations.
P10: Voordekunst is considered as not “the right thing to do”.
Rather then looking at the compatibility with the potential adopter itself (C-3PO), this proposition questions the suitability of this particular method of funding among the adopter’s social-political environment (see also paragraph 3.4). Especially Question 25 addresses this issue and all respondents are unanimously agreeing that this method of funding will be fully accepted by their social-political environment. Nonetheless, two contributors (B & E) cautiously recognize that this innovation is still in its relatively infancy and due to uncertainties could be considered as not the right thing to do at this particular time.
P11: If Voordekunst cannot build upon a clear, good en perhaps existing reputation it will be adopted less quickly.
