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."

More stories

Miniclip to acquire mobile game developer Sybo

The latest acquisition joins the mobile gaming firm's recent additions which includes Supersonic Software and Eight Pixels

By Jeffrey Rousseau

Game devs speak up for abortion rights

Studios and organizations across the industry condemn US Supreme Court decision allowing criminalization of abortion, commit to support employees, share fundraising links

By Brendan Sinclair

Latest comments (10)

Jim Webb Executive Editor/Community Director, E-mpire Ltd. Co.6 years ago
Something odd about that criteria for failure.
3Sign inorRegisterto rate and reply
Paul Jace Merchandiser 6 years ago
About 1 out of every 11 funded Kickstarter projects end in failure
Still much better odds than playing the lottery.
4Sign inorRegisterto rate and reply
Alfonso Sexto Lead Tester, Ubisoft Germany6 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.
0Sign inorRegisterto rate and reply
Show all comments (10)
Eyal Teler Programmer 6 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.
0Sign inorRegisterto rate and reply
robert troughton Managing Director, Coconut Lizard6 years ago
Shouldn't the title be more like "9% of successfully funded Kickstarter projects fail"?
7Sign inorRegisterto rate and reply
Jamie Firth Video Games Production 6 years ago
I'm with Robert - my reading of this is "9% of KickstarteD projects fail"?
4Sign inorRegisterto rate and reply
Jim Webb Executive Editor/Community Director, E-mpire Ltd. Co.6 years ago
Exactly what is throwing me off. And I'm quite certain more than 9% of all Kickstarters fail.
0Sign inorRegisterto rate and reply
John Pickford Owner, Zee 36 years ago
I wonder if Godus is classified as a fraud or failure.
1Sign inorRegisterto rate and reply
Bill Young Head of Strategic Partnerships & Sponsorships, esports, Twitch6 years ago of Kickstarter projects succeed? ...that's...amazing!! Congratulations, Kickstarter!!
3Sign inorRegisterto rate and reply
Aleksi Ranta Category Management Project Manager 6 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.
3Sign inorRegisterto rate and reply

Sign in to contribute

Need an account? Register now.