Crowdfunding is an increasingly popular way of getting a new business off the ground. In 2019, the crowdfunding market in North America alone was worth more than $17 billion. Plus, that market is growing by about one third per year. So it’s logical that budding entrepreneurs in search of crowdfunding success want to get in while the getting’s good.
Many factors contribute to crowdfunding success
So what can those aspiring founders do to increase their chances of running a winning campaign? Lots of recent research has looked into the factors that contribute to crowdfunding success. Examples include the project’s location, how much prior experience the founders have, and the amount of money being asked for. Other factors involve the duration of the campaign, the rewards that backers receive, and even the quality of the promotional videos.
But one overlooked aspect is personality. Only a few studies so far have looked into the personality traits that can make or break a campaign. A new study by a pair of Italian researchers sheds some light on that issue, specifically on whether the personality trait of narcissism pays a role. Their new paper has just appeared in the journal Personality and Individual Differences. And the short answer is that yes, narcissism makes a difference. And no, it doesn’t help.
Success means minding your pronouns
Researchers Vincenzo Butticè and Paola Rovellia examined a sample of almost 60,000 Kickstarter campaigns launched by individual entrepreneurs in 2016 and 2017. In their new paper, they find a significantly negative relationship between narcissism and crowdfunding success. The more narcissistic the entrepreneurs, the less likely they were to get funded on Kickstarter.
To measure narcissism, Butticè and Rovellia looked at campaigns’ use of first-person pronounces, like “I” and “me.” This is a well-established (though controversial) technique in personality research. And Kickstarter campaigns are eminently suited to this kind of analysis, because Kickstarter requires each campaign to provide a written text to explain the project. The average length of these texts on Kickstarter is almost 4,000 words, creating ample opportunity to analyze how much an aspiring entrepreneur focuses on themselves, rather than “you” or “we.”
A tough sell for crowdfunding auteurs
The researchers found the negative association between narcissism and crowdfunding success was strongest in the campaign categories of art, design, film, food, journalism, and theatre.
It was somewhat weaker in the categories of comics, music, and publishing. And the association was not statistically significantly in the categories of dance, fashion, games, photography, tech, or crafts.
This suggests that blatant displays of narcissism turn off potential campaign backers in some categories more than others. In contexts where the product is more closely tied to the creator (for example the director of a film, or the artist of a portrait), “backers seem to penalize more narcissism.”
But when the product has more to do with its functionality (e.g., the content of a comic book), backers pay less attention to the entrepreneur, and the penalization for narcissism diminishes, or even disappears. This comports with the view that in some sectors, investors see overly narcissistic entrepreneurs as a threat to the venture.
Narcissism in business
This result wasn’t a foregone conclusion. Narcissism isn’t always a bad thing, especially in the world of business. Past research has found that companies helmed by narcissistic CEOs narcissism undertake more M&As, and make higher bids for other firms. They’re also more likely to engage in fraud and sketchy forms of tax avoidance.
Similar pros and cons also apply to narcissistic entrepreneurs. They generally gravitate towards riskier ventures, excel at business planning, and are more likely to see themselves as the sole creators of the firm. They’re also less likely to learn from failure.
Actually, the fact that narcissism plays such a key role in business shouldn’t surprise anyone. Narcissism encompasses traits such as vanity, self-absorption, entitlement, superficial emotional bonds, manipulative behaviors, a charming exterior, diminished empathy, excessive self-esteem, and a preoccupation with power and success. Many of those traits confer an advantage in business, especially where competition is fierce. And that certainly applies to Kickstarter, where only about 37% of campaigns get funded.
Study: “‘Fund me, I am fabulous!‘ Do narcissistic entrepreneurs succeed or fail in crowdfunding?“
Authors: Vincenzo Butticè and Paola Rovelli
Published in: Personality and Individual Differences Volume 162
Publication date: August 1, 2020
Image: by Andrea Piacquadio from Pexels
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