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9% of Kickstarter projects fail - Study

Wharton School researcher finds relatively few campaigns on crowdfunding site end in fraud or failure

About 1 out of every 11 funded Kickstarter projects end in failure, according to a new study from a researcher at the Wharton School of the University of Pennsylvania.

In March, the crowdfunding website invited Professor Ethan Mollick to assess how many of the projects on its site failed to follow through on their promises. While Kickstarter collaborated with Mollick to gather data, all of the professor's analysis was conducted independently, and he was not compensated for his work.

When asked about rewards, 5.2 percent of respondents said they never received them, while another 2 percent received a reward, but felt it was not what they had been promised. Mollick limited his definition of failure to those outcomes, although another 18.8 percent of survey takers said they had not received a reward yet but were still expecting to get it eventually.

Even though 7.2 percent of respondents said their projects failed, different backers could disagree on whether or not a specific project fulfilled its reward as promised. To adjust for this, Mollick reported different failure rates depending on how strict one wanted to interpret the idea of a failed campaign. If the threshold of failure was having a single unsatisfied backer among the respondents, then Mollick found 9.95 percent of campaigns would be considered failures. If all responding backers had to consider a project a failure, then the number dropped to 5.6 percent. And if at least half of backers had to consider a project a failure, then the rate is about 8.6 percent, still low enough for him to deem it a "relatively rare" occurrence.

He added that there are few commonalities behind projects that end in failure. Those raising under $1,000 tend to fail at a slightly higher rate, as do campaigns for food, technology, or film projects. Music was one genre where failure happened much less frequently.

"The fact that failures seem to be distributed in non-predictable ways should offer some comfort about the underlying ability of backers to weed out projects that might offer obvious signs of trouble)," Mollick said, adding, "Ultimately, there does not seem to be a systematic problem associated with failure (or fraud) on Kickstarter, and the vast majority of projects do seem to deliver."

Latest comments (10)

Jim Webb Executive Editor/Community Director, E-mpire Ltd. Co.2 years ago
Something odd about that criteria for failure.
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Paul Jace Merchandiser 2 years ago
About 1 out of every 11 funded Kickstarter projects end in failure
Still much better odds than playing the lottery.
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Alfonso Sexto Lead Tester, Ubisoft Germany2 years ago
Not sure about that criteria. I guess that in "rewards" the project seeing the light of day is included? Personally that is my wish when I donate money to fund something.
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Show all comments (10)
Eyal Teler Programmer 2 years ago
I imagine that if the project result is offered as reward (which is the case for games), then that's included. I agree that for projects where the rewards do not include the project result, the criterion may not be the best for judging success or failure. (But I assume these projects are a minority.) There are also cases in which the project gets finished but the rewards for higher tiers don't materialise, and it's not clear whether this should be considered as a project failure.
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robert troughton Managing Director, Coconut Lizard2 years ago
Shouldn't the title be more like "9% of successfully funded Kickstarter projects fail"?
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Jamie Firth Video Games Production 2 years ago
I'm with Robert - my reading of this is "9% of KickstarteD projects fail"?
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Jim Webb Executive Editor/Community Director, E-mpire Ltd. Co.2 years ago
Exactly what is throwing me off. And I'm quite certain more than 9% of all Kickstarters fail.
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John Pickford Owner, Zee 32 years ago
I wonder if Godus is classified as a fraud or failure.
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Bill Young Head of Strategic Partnerships & Sponsorships, esports, Twitch2 years ago
...so...91% of Kickstarter projects succeed? ...that's...amazing!! Congratulations, Kickstarter!!
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Aleksi Ranta Category Management Project Manager 2 years ago
@John Pickford
I think it is classified as pure Peter Molyneux. And those things never fail or are a fraud. They just live their own life in the bottomless pit of over promises and under deliveries, up until PM gets another prize for some lifetime achievement and we forgive him for everything.
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