Avimanyu Avi Datta Ph D Associate Professor of

Avimanyu (Avi) Datta, Ph. D. Associate Professor of Strategy and Entrepreneurship, College of Business, Illinois State University http: //avimanyu. weebly. com

Presentation Overview � About me › Glance › Career Objectives › Research Focus › Research work � Crowdfunding › Motivation study

About me: A Glance Avimanyu (Avi) Datta � B. Sc. Computing and Information Systems, University of London � M. S. Information Systems, Hawaii Pacific University � Ph. D. , Washington State University (2011) Associate Professor of Strategy and Entrepreneurship: Illinois State University (Fall 2017 -Present) � Research Fellow: Means Center of Entrepreneurial Studies: Illinois State University (Fall 2017 –Present) � Assistant Professor of Strategy and Entrepreneurship : Illinois State University (Fall 2011 -July 2017) � Enjoy Painting and Sketching: http: //avimanyu. weebly. com/paintings-etc. html � Enjoying brewing Espressos �

About me: Career Objectives Research Teach Practice Develop and test theories Simplify the findings: Class room Teaching Synthesize the findings: Prescriptive Recommendations

About me: Research Focus Crowdfunding Strategy Capabilities IT Capabilities Entrepreneurship Information Systems Innovation Commercializations Firm Boundaries Radical Innovations, Breakthrough Innovations

Research Era: From Fall 2007 Resource and Knowledge based view of firm; Absorptive Capacity; Ambidexterity; Dynamic Capabilities, Transaction Cost Economies; Prospect theory IT Capabilities; product launch 2007 -2010 Radical Innovations, Breakthrough Innovations; Patents Crowdfunding; product launch; SSM. ; EO; IO 2011 -2016 Radical Innovation of Short lived products; defining breakthrough 2017 -2022

� About me: Research work Published in › Journal of International Management › Information Systems Research (ISR) › R&D Management › International Journal of Innovation Management › Technovation � Presented in: › Strategic management Society (2011, 2015) › AMCIS (2008, 2009, 2010) › Academy of Management (AOM: 2010, 2012, 2013, 2014, 2017, 2018) › Southern Management Association (2008; 2012 ) › Atlanta Competitive Advantage Conference (ACAC: 2010) › Marketing Science Conference (2012) › INFORMS Conference on Marketing Sc. (2012) � Under Review › › › Journal of Small Business Management Journal of Product Innovation Management Journal of Business Research

A little bit more….

Crowdfunding-campaign success: The effect of entrepreneurial orientation and strategic use of social media Avimanyu Datta

Motivation Entrepreneurial Orientation It is evident that crowdfunding projects are entrepreneurial in nature; however, extant research has yet to examine the influence of entrepreneurial orientation (EO) on crowdfunding campaigns’ success(Gathungu et al. , 2014) Covin and Miller (2014) have called for examining the role of EO from the context of young ventures, asking scholars to look beyond "view[ing] EO as a phenomenon associated with corporate entrepreneurship Strategic use Social Media Since entrepreneurs seeking such funding use internetbased platforms by design, it is possible that a strategic use of social media may help CFS given that social media has become a crucial tool for the diffusion of innovations in the current economy, moving from a secondary marketing channel to a proactive medium for creating movements, elevating awareness, and raising funds (Gleasure, 2015; Hoffman and Fodor, 2010; Mollick, 2014) Crowd funding Success young ventures with innovative and proactive behavior have the ability to use social media as a strategic tool to inform their campaigns, engage with potential customers, and seek feedback (Aral et al. , 2013)

Constructs and Definitions Entrepreneurial Orientation (EO) is a composite construct of a firm’s “processes, structures, and behaviors of firms that are characterized by innovativeness, proactiveness, and risk taking” (Covin and Slevin, 1989; Stam and Elfring, 2008) Crowdfunding Campaign Success (CFS) is defined as the efforts by entrepreneurial individuals and groups—cultural, social, and for-profit—to fund their ventures by drawing on relatively small contributions from a relatively large number of individuals using the internet, without standard financial intermediaries (Mollick, 2014) We define Strategic Use of Social Media as a firm’s ability to strategically use social media includes adoption of one or more platforms to encourage the spontaneous movement of people to fund popular ideas, creating a ‘bandwagon effect’ and attracting potential customers via online tools or apps (Di. Staso and Mc. Corkindale, 2013; Li and Bernoff, 2011; Wright and Hinson, 2012). In this way, prospective customers become investors.

Theoretical Overview Substantive capabilities represent an organization’s set of skills, while dynamic capabilities represent the ability of the organization to change and refine these skills… organizations can utilize EO to reconfigure their resource base to develop new routines and capabilities (Teece et al. , 1997)” Strategic use of social media involves effective deployment of dialogic loop which allows stakeholders to query the organization and the organization to respond to queries (Kent & Taylor 1998; Taylor & Kent 2014); and leveraging word of mouth online (e. WOM) for spreading brand-related information and getting feedback including information about their preferences, desires, and needs (Chu & Kim 2011)). We view SSM as a substantive capability. Entrepreneurial Orientation (EO) EO represents a dynamic organizational capability for firms through its impact on the acquisition and combination of knowledge-based resources (Zahra et al. , 1999) Strategic use of Social Media (SSM) Crowdfunding Success (CFS)

Interplay among constructs: EO and CFS Firms with innovativeness, proactiveness and risktaking abilities will have an advantage over other firms in terms of attracting potential micro lenders to their projects. EO capabilities will enable firms to proactively identify marketing opportunities, tap into a market through innovative solutions, and build campaigns that have greater creativity and can highlight a compelling value proposition for both potential backers and customers (Lassen, Gertsen & Riis 2006; Cooper & Edgett 2008; Wong 2014). Entrepreneurial Orientation (EO) Crowd Funding Success (CFS) In sum, building on prior work that posits EO as a dynamic capability (Kreiser 2011; Brouthers et al. 2015), we argue that EO will help develop effective crowdfunding campaigns around creative and novel ideas resulting in campaign success Hypothesis 1: Entrepreneurial orientation (EO) of a firm will be positively associated with crowdfunding campaigns’ success (CFS).

Interplay among constructs: EO and SSM Entrepreneurially oriented firms must be particularly innovative and proactive in establishing routines that make use of social media platforms to spread awareness of products and develop relationships with customers. Creativity and proactiveness drive firms to use social media platforms in order to leverage innovative ideas, learn about their competition, and scan the external environment (Bughin et al. 2011). Such proactiveness raises awareness of future trends, competitors’ moves, and industry trends, and helps companies take advantage of opportunities (Zhou & Shalley 2003; Chen et al. 2015). Entrepreneurial Orientation (EO) Innovativeness and proactiveness help firms transcend geographic and time barriers, since social media platforms are generally global (Alfonso & Suzanne 2008; Lewis, Kaufman, Gonzalez, Wimmer & Christakis 2008) Strategic use of Social Media (SSM) The rewards for such risk-taking include two-way stakeholder engagement in an ethical manner that provides feedback and learning to the firm via social network-enabled dialogue (Di. Staso & Mc. Corkindale 2013). Hypothesis 2: Entrepreneurial orientation (EO) of a firm will be positively associated with its use of social media strategically.

Interplay among constructs: SSM and CFS The ability to use social media strategically leverages the capacity to generate ideas based on interactive and dynamic exchanges between a network of users, including stakeholders and customers (Mangold & Faulds 2009; Mount & Martinez 2014; Du, Yalcinkaya & Bstieler 2016). The ability to use social media strategically can develop routines for effective exchanges via crowdfunding, resulting in vested communities that shape the market for a product through information, features, and unique selling propositions (USPs) and even preorders. A firm’s ability to strategically use social media will facilitate information exchange regarding the crowdfunding campaigns for new products Strategic use of Social Media (SSM)) Crowd Funding Success (CFS) Such an exchange of information between design teams and stakeholders, including potential customers, may bring diverse ideas from multiple sources and lay the groundwork for monetizing the project. It can also generate trust between entrepreneurs and potential backers, giving the project greater legitimacy Hypothesis 3: A firm’s ability to strategically use social media will be positively associated with the success of its crowdfunding campaigns.

Interplay among constructs: Complimentary Mediation Innovative, proactive, and risk-taking abilities of firms with EO will influence crowdfunding success through the strategic use of social media. EO alone cannot be expected to deliver a crowdfunding campaign’s success, since the positive effects of innovativeness, proactiveness, and risk-taking depend on the strategic use of social media When firms are endowed with EO, meaning that they are innovative, proactive, and risk- takers, they may be able to manipulate substantive routines and resources associated with the use of social media by reconfiguring, renewing, and recombining them over time (Winter 2003; Zahra et al. 2006). Entrepreneurial Orientation (EO) Strategic use of Social Media (SSM) Crowdfunding Success (CFS) Thus, a firm’s strategic use of social media enables firms to fully develop effective crowdfunding campaigns with higher odds of success. We further propose that EO alone cannot be expected to account for the success of crowdfunding campaigns independently, but rather, that the manifestation of its effect happens through a firm’s ability to strategically use social media. Hypothesis 4: A firm’s ability to strategically use social media (SSM) will complement the relationship between entrepreneurial orientation (EO) and a crowdfunding campaign’s success (CFS).

Theoretical Model Strategic Use of Social Media( SSM) Entrepreneurial Orientation ( EO) Crowd Funding Success (CFS)

Methods: Sampling Deployment of Professional Panel Gathering Firm By being involved with a professional crowdfunding campaign, this sample will be qualified to provide insight into this study. 1, 044 responses to the online survey were gathered by the professional company. 1044 Responses Working Professionals Rigorous Data Cleaning Final N= 322. Professional panel gathering company was contracted to collect data. We specified that the sample needed to be of working professionals directly involved with at least one crowdfunding campaign Individual responses were removed based on the following criteria: 1. unrealistic value for number of employees in the business, 2. goal amount of the crowdfunding campaign 3. Facebook/You. Tube/Twitter followers 4. an inappropriate combination of job department and job title 5. Inappropriate crowdfunding project scope 6. Responses with more than 25% values missing or more than 90% repeated values

Methods: Measures EO SSM CFS • Entrepreneurial Orientation (EO) was measured using preexisted items (Covin & Slevin 1989; Lee & Sukoco 2007) which were modeled as a second-order factor comprising constructs of Risk Taking, Innovativeness, and Proactiveness • Firm's Ability to Strategically Use Social Media (SSM) was measured with 8 items adapted from Di. Staso & Mc. Corkindale (2013) • These items were worded to capture a respondent’s firm’s ability to use social media in crowdfunding campaigns and the role social media played in the success of crowdfunding campaigns. • crowdfunding campaign success (CFS) was measured as a first-order construct comprising 7 questions • The created items are based on the assertions and findings of previous crowdfunding research (Mollick 2014; Mollick & Kuppuswamy 2014) that highlight key ideas related to crowdfunding campaign’s success. • This seven-item instrument was tested during the pilot study and displayed acceptable validity, loadings, and significance, so each item was retained for the main study. Control Variables: We controlled for number of employees in the company; having a company Facebook page, You. Tube channel, and/or Twitter account; and gender of respondent. These were used to reduce possible issues of company size, access to social media, and gender bias.

Analysis and Results We tested our hypotheses using partial least squares modeling (PLS-SEM) through Smart. PLS 3. 0 (Ringle, Wende & Becker 2014) PLS was selected due to its superiority in testing exploratory models and models designed to uncover the existence of a relationship rather than a better fit for existing models (Hair, Ringle & Sarstedt 2013). Additionally, since PLS does not require normality of the data, it can be applied to situations where normality cannot be assumed In our model, items which were not significant; had an item loading of less than. 5; lowered the construct’s AVE below the threshold of. 5; or violated discriminant validity were removed from the analysis. Based on these criteria, two items were removed from EO.

Analysis and Results: Validity After removal of items, the model demonstrated an acceptable discriminate validity with all square root of AVEs larger than correlations with other constructs, known as the Fornell-Larcker criterion (Fornell & Larcker 1981; Fornell & Larcker 1981). No item had a cross-loading larger than its primary loading (Hair et al. , 2013), and the heterotrait-monotrait (HTMT) ratios are below the. 85 threshold For PLS-SEM, common method bias (CMB) is detected through a full Collinearity assessment approach (Kock 2015). Common method bias does not seem to be a concern as the variance inflation factors (VIFs) are all well below 3. 3 (Kock 2015).

Variables (Predictors) Control No. of Employees FB page Twitter Page Youtube Channel Age Gender Ethnicity Variables (Outcome) CFS CFS Relations without mediation H 1: EO (IV) H 3: SSM (IV) CFS Relations with mediation H 1: EO (IV) H 2: EO (IV) H 3: SSM (mediator) CFS SSM CFS Model 1 Model 2 Model 3 Beta (p value) Collinearity. 14, p >. 05 -. 08, p >. 10 -. 03, p >. 10 -. 17, p >. 05 -. 15, p >. 10 -. 05, p >. 10 -. 15, p >. 10 1. 12 1. 06 1. 14 1. 16 1. 05 1. 04 . 01, p >. 10 -. 02, p >. 10. 0, p >. 10 -. 04, p >. 10. 01, p >. 10 -. 07, p >. 10 -. 11, p >. 10 1. 18 1. 06 1. 14 1. 16 1. 23 1. 12 1. 05 Beta (p value). 12, p <. 05. 59, p <. 001 Collinearity 1. 34 1. 29 . 01, p >. 10 -. 02, p >. 10. 0, p >. 10 -. 04, p >. 10. 01, p >. 10 -. 07, p >. 10 -. 11, p >. 10 1. 18 1. 06 1. 14 1. 16 1. 23 1. 12 1. 05 Beta (p value). 14, p <. 001. 39, p <. 001. 62 p <. 001 Collinearity 1. 34 1 1. 3 R 2, Adj R 2, AIC CFS SSM CFS R 2 Adjusted R 2 AIC 0. 15, p>. 05 0. 13, p>. 05 807. 159 0. 43, p<. 001 0. 41, p<. 001 607. 904 0. 15, p<. 05 0. 52, p<. 001 0. 51, p<. 001 589. 301 R 2 Improvement from Previous Model Adjusted R 2 Improvement from Previous Model AIC Improvement from Previous Model 0. 28, p<. 01 0. 28, p>. 01 199. 255 0. 09, p<. 05 0. 1, p<. 01 18. 603

Analysis and Results: Hypotheses . 39*** . 62*** . 14** *P<. 01; ***P<. 001

Analysis and Results: Hypotheses � � Hypothesis 1 posited that EO would positively affect CFS. The data support this hypothesis (β =. 14, p <. 01) in that greater degree of entrepreneurial orientation is associated with greater success of crowdfunding campaigns. Hypothesis 2 posited that EO would positively affect SSM. The data support this hypothesis (β =. 39, p <. 001) in that greater entrepreneurial orientation is associated with higher ability to strategically use social media. � Hypothesis 3 posited that SSM would positively affect CFS. The data support this hypothesis (β =. 62, p <. 001) in that superior ability to strategically use social media is associated with greater success in crowdfunding campaigns. � Finally, Hypothesis 4 posited that SSM would provide complementary mediation of the relationship between EO and CFS. The data support this hypothesis as both the mediated relationship (EO - SSM - CFS) and the direct relationship (EO - CFS) are significant and point in the same direction (Zhao et al. , 2010).

Implications of Results H 1 • Proactive, innovative and propensity to take risks positively affect its ability to taste success in its crowdfunding campaigns. H 2 • A firm that is more innovative and proactive may incorporate users’ innovative ideas and continually learn about industry environment and future trends • a risk taking attitude helps not only with market intelligence but in creating and spreading awareness by strategically using social media • firm’s innovativeness drive them to use social media platforms to leverage innovative ideas, learn about potentially competition, and scan the external environment. H 3 H 4 • firms’ ability to strategically use social media will facilitate information exchange about new products between design teams and stakeholders, including potential customers • the firm will then benefit from innovative ideas derived from diverse sources and lay the groundwork for monetizing a concept based on trust, legitimacy, and positive signals. • EO alone cannot be expected to contribute significantly to create success of crowdfunding campaigns given that the positive effect of innovativeness, proactiveness, and risk taking on crowdfunding campaign’s success depend on the strategic use of social media • EO alone cannot fully account for the success of crowdfunding campaigns’ independently, but rather, this effect is manifested through a firm’s ability to strategically use social media.

Discussions Theoretical • Contextual contribution to the capabilities view using the relationship among crowdfunding, strategic use of social media and entrepreneurial orientation as a reference point. • The hypotheses and ensuing support in evidence in this study provide a logical understanding of the conditions for which the relationships hold true Managerial • Firms must create reward systems for managers who can proactively use social media to engage potential contributor through means of crowdfunding. • Firms should develop a social media policy for both developers and customers, build community, and learn new methods to promote their products (Culnan et al. 2010; Di. Staso & Mc. Corkindale 2013). • In addition, firms should encourage and reward their employees to devise ways of communicating with users through social media.

Limitations and Future Research We used surveys, and there is always a risk of reality versus perception of reality, while surveying small firms, where data cannot be verified by secondary sources. • Future studies might look at large publicly traded firms, where the data reported by managers can be verified from secondary sources. Relevance may be limited to the understanding a respondent’s perception of what is crowdfunding, or what it means to strategically use social media • Future research could be aimed at a more nuanced understanding of CFS from the standpoint of the type of product for which a funding is sought: whether it is a new version of an existing product or a completely novel product (Hurmelinna. Laukkanen, Sainio & Jauhiainen 2008. We studied only new ventures, the generalizability of the study may be restricted to ventures that rely on crowdfunding, in other words, relatively young firms who use social media more aggressively. • Future researchers may wish to look at how established firms strategically manage social media in light of crowdfunding. The Effect of EO and SSM on CFS may differ across industries where protection of invention is high (Datta et al. 2015), such as pharmaceuticals • Future studies should look into the dynamism and strength of intellectual protection as viable moderators to see how EO and SSM affect CFS Customers who become investors may not be best judge of the impact of a product. • Future research could see of impactful innovations can come out of crowdfunding campaigns or they are usually funded by more traditional source of capital rising.

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