Talking Up a Storm: How Backers Use Public Discourse to Exert Control in Crowdfunded Systems Development Projects

Crowdfunding has emerged as a popular alternative to traditional funding, wherein project owners use web technologies to fundraise from members of the public (“backers”). The established models of control do not work for this new way of performing systems development, because of the number and diversity of controllers, the restriction of interaction to public online discourse, and the absence of defined hierarchical power structures. This study performs a critical discourse analysis of public online discourse from two famous crowdfunded systems development projects. It develops a framework for the study of crowdfunding control that incorporates the prominent role that power, informal control, and discourse play. The study shows that backers are empowered by their ability to construct a positive or negative public image around a project, and they use this power to impose a diverse portfolio of formal and informal controls. Findings reveal a fundamental vulnerability in crowdfunding, as public perceptions of failure push backers to become increasingly assertive and owners to become decreasingly compliant.

The online appendix is available at https://doi.org/10.1287/isre.2019.0840.