Communication of post-release plans in crowdfunding development initiatives: A signaling perspective

• Published in: International journal of information management 2023-04, Vol.69, p.102592, Article 102592
• Main Author: Ghobadi, Shahla
• Format: Article
• Language: English
• Subjects: Case study; Communication; Crowd; Crowdfunding; Digital; Entrepreneurship; Grounded theory; Information sharing; Post-release; Software; sustainable development
• ISSN: 0268-4012; 1873-4707
• DOI: 10.1016/j.ijinfomgt.2022.102592

Significant research explores how developers leverage crowdfunding to attract finance for releasing digital goods. However, researchers seldom study “post-release activities” that are crucial for maintaining and advancing those goods. This article elaborates on the challenging nature of post-release activities for crowdfunding initiatives, asking how developers communicate their post-release plans to effectively prepare backers for possible changes. Using a grounded approach that connects the longitudinal history of fundraising to development to post-release, I examine initiatives that achieved impressive fundraising and development results yet varied significantly in their post-release outcomes. While they consistently signaled post-release plans, the differences are the signals’ costs, backers' reactions, and the post-release activities and outcomes. I present theoretical propositions that (1) developers benefit in the long run by combining high-cost signaling with engaging backers in follow-up conversations about post-release issues and (2) prospective backers can utilize developers' communication to identify their post-release signals. Unlike dominant research findings about signals’ impacts on mobilizing resources during fundraising, the findings emphasize signals’ post-release consequences for stakeholders. While different signaling approaches can enhance short-term performance, they also seed contrasting longer-term outcomes for developers, backers, and the industry. These findings advance knowledge on effective strategies for engaging society to build sustainable digital goods. •Crowdfunding development initiatives rely on post-release activities.•This study examines polar cases that pursued different post-release paths.•I ask how developers can communicate post-release plans.•Communicating post-release plans helps achieve positive outcomes.•High-cost signals are beneficial if they lead to effective conversations with backers.•Communicating post-release plans enhances trust in the crowdfunding industry.