Crowdfunding How Established Companies Can Benefit From Crowdfunding Initiatives

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1 Department Of Marketing Date 01/ Master s Thesis 2014 Crowdfunding How Established Companies Can Benefit From Crowdfunding Initiatives By Kristian Tabermann Cand.Merc. Strategic Market Creation Supervisor: Liana Razmerita Department of International Business Communication Number of Standard Pages: 73,8 STUs: Studentsignature:

2 Executive)Summery) The startling rise of crowdfunding has raised awareness of and interest in its potential. Moreover, it has attracted the attention of scholars in finance, economics and management. Studies have been conducted ondiverse subjects and datasets from various crowdfunding platforms, to investigate why individuals are motivated to participate in crowdfunding initiatives, why some campaigns reach their funding goal, and why some campaigns do not. Crowdfundinginitsbroadestsensemeanspoolingmoneyfroma large groupofpeople,i.e. crowd, typically comprised of small individual contribution, to support another s effort to accomplishaspecificgoal. TheconceptofcrowdfundingbeganasawayforstartAups,artistsandindividualswithlimited monetary resources to be able to fulfill their dreams. In a collaborative economy, crowdfunding has helped hundreds of thousands worldwide to realize their visions. Nowadays,thecrowdfundingspaceisstartingtoseeanincreasedawarenessfromestablished companiesthatwanttoutilizethepowerofthecrowd. Theaimofthisstudyistoinvestigatehowestablishedcompanies socialmediaactivitiescan supportcrowdfundinginitiativesinordertoincreasecustomerengagementwiththehelpof social Customer Relationship Management (social CRM) and Relationship marketing (RM). Thefindingssuggestthatestablishedcompanieshavetounderstandandcommunicatewith theircustomersinawholenewwayinordertobuildlongatermrelationships.furthermore, the findings propose how companies with tools from social CRM and RM might attract and effectively create customer engagement and foster brand advocates. However, using these two concepts in a crowdfunding context will require a major shift in the corporate mindset towardscollaborationandtransparency. However, if it is done appropriately, the resulting benefits in terms of reputation and more valuable relationship with customers can be significant. However, since crowdfunding is in it nascent phase, more theoretical studies have to be conducted before being able to predict and measure the value of Social CRM and RM in a crowdfundingacontext. 1

3 Table)of)Contents) EXECUTIVE(SUMMERY( 1 TABLE(OF(FIGURES( 4 1.(INTRODUCTION( 5 1.1(RAISING(CAPITAL(IN(AGE(OF(CROWDFUNDING( 5 1.2(THE(CROWDFUNDING(MARKET( CROWDFUNDINGMODELS CROWDFUNDINGWALKTHROUGH FLEXIBLEFUNDINGVS.FIXEDFUNDING (PROBLEM(DEFINITION( (RESEARCH(QUESTION( (STUDY(SETTING( (SCOPE(&(DELIMITATION( 17 2.(METHODOLOGY( (CHOOSING(THE(RIGHT(RESEARCH(DESIGN( (METHODOLOGICAL(IMPLICATIONS( CRITERIAINSOCIALRESEARCH EPISTEMOLOGICAL&ONTOLOGICALORIENTATION INDUCTIVE,DEDUCTIVE&ABDUCTIVEREASONING RESEARCHDESIGN (DATA(COLLECTION( CASESTUDY SELECTINGTHECASE INTERVIEWS SECONDARYDATA (LIMITATIONS(OF(THE(DATA(COLLECTION( 27 3.(LITERATURE(REVIEW(&(THEORETICAL(FRAMEWORK( (THE(RISE(OF(CROWDFUNDING( (THE(ROOTS(OF(CROWDFUNDING( WEB CROWDSOURCING,OPENSOURCE,OPENINNOVATION,LEADUSERS&USERINNOVATION SERVICEMARKETING BRANDCOMMUNITIES DONORBEHAVIOR&MICROFINANCE SERVICEDOMINANTLOGIC&SOCIALCAPITAL (MOTIVATIONAL(DYNAMICS(OF(CROWDFUNDING( THEENTREPRENEURS MOTIVATIONALDYNAMICS (RELATIONSHIP(MANAGEMENT(&(MARKETING( SOCIALCUSTOMERRELATIONSHIPMANAGEMENT INTERPERSONALRELATIONSHIPMARKETINGTHEORY (SOCIAL(MEDIA( EFFECTSOFSOCIALMEDIAONCROWDFUNDINGINITIATIVES (CUSTOMER(ENGAGEMENT( CUSTOMERENGAGEMENTCONCEPTANDITSSIGNIFICANCE CUSTOMERENGAGEMENTMARKETINGCYCLE 45 2

4 3.6.3CUSTOMERENGAGEMENTONLINE (ORGANIZATIONAL(LEGITIMACY(&(CROWDFUNDING( CREATINGCROWDFUNDINGLEGITIMACY (PERCEIVED(VALUE( (MARKETING(VALUE(OF(CROWDFUNDING( (ONLINE(SOCIAL(COMMUNITIES( (CONSUMER(ENGAGEMENT(IN(AN(ONLINE(COMMUNITY( UNDERSTANDINGTHEROLEOFCOMMUNITYINCROWDFUNDINGWORK (DISCUSSION(&(REFLECTIONS( 53 4.(FINDINGS( (CASE(STUDY( MIKKELLERAPS MIKKELLER HUMANCOMMUNICATIONTHROUGHSOCIALMEDIA MIKKELLER&CROWDFUNDINGPLANS (EXPERT(INTERVIEWS( CROWDFUNDINGFORMARKETINGPURPOSES CROWDFUNDINGINITIATIVESCONNECTEDTOSOCIALMEDIAMARKETING CROWDFUNDINGASACUSTOMERENGAGEMENTCHANNEL CROWDFUNDINGTOFOSTERBRANDADVOCATES CROWDFUNDINGRISKSFORESTABLISHEDCOMPANIES (REFLECTIONS( 71 6.(DISCUSSION,(IMPLICATIONS(&(CONCLUSION( (FINDINGS( (MANAGERIAL(IMPLICATIONS( (CONCLUSION( LIMITATIONSOFTHESTUDY&FURTHERRESEARCH 82 7.(BIBLIOGRAPHY( 84 8.(APPENDICES( 92 APPENDIX(I(H(INTERVIEW(WITH(JACOB(GRAM(ALSING((2014)( 92 APPENDIX(II(H(INTERVIEW(WITH(JAN(WARHUUS((2014)( 96 APPENDIX(III(H(INTERVIEW(WITH(DENNIS(HØRMANN((2014)( 103 APPENDIX(IV(H(INTERVIEW(WITH(JOHN(VASKIS((2014)( 108 APPENDIX(V(H(MIKKELLER S(EXPANSION(TIMEHLINE( 110 ) 3

5 Table)of)Figures) FIGURE1 GLOBALCROWDFUNDINGMARKET(RAISEDFUNDS/NO.OFPORTALS)...6 FIGURE2AGOOGLETRENDSEARCH"CROWDFUNDING"...7 FIGURE3ADIFFERENTTYPESOFCROWDFUNDING...8 FIGURE4AHOWATYPICALCROWDFUNDINGCAMPAIGNISMADE...9 FIGURE5ATHEACCUMULATIONOFROLESPLAYEDBYCONSUMERSINMARKETINGLITERATURE...12 FIGURE6ACROWDFUNDINGMARKETINGTOOLS...14 FIGURE7ATHREEFORMSOFLOGIC...22 FIGURE8ATASKSANDOBJECTIVESOFSOCIALCRM...37 FIGURE9AMODELOFINTERPERSONALRELATIONSHIPMARKETING...39 FIGURE10 4C SOFCONSUMERENGAGEMENTINSOCIALBUSINESS...41 FIGURE11 CUSTOMERENGAGEMENTMARKETINGCYCLE...46 FIGURE12ACROWDFUNDINGWORKANDROLEOFCOMMUNITYTHROUGHOUTTHEWORKPROCESS

6 1.)Introduction) Thefollowingsectionswillintroducethebackgroundofthisstudy,i.e.therelevanceof crowdfundinginitiatives,problemdefinition,andthepurposeofthisstudyendingwiththe researchquestion. 1.1)Raising)Capital)In)Age)Of)Crowdfunding) Analternativemethodoffinancingnewprojectsisrapidlychangingthewayentrepreneurs, startaupsandcompaniesnormallythinkofwhenneedingtoraisecapital.thephenomenonis called crowdfunding, and it has put a twist on the known practices of raising money e.g. fundraising and donation. Crowdfunding in its broadest sense means pooling money from a large group of people, i.e. crowd, typically comprised of small individual contribution, to supportanother sefforttoaccomplishaspecificgoal(griffin2012;bannerman2013). The concept of crowdfunding is originally linked together with artists, musicians, and entrepreneurs. Crowdfunding is seen as a method to getunknownindividualsto payfor projects,whichcouldnothavebeenmadewithoutthehelpothers 1.Moreover,theconceptof crowdfunding initiatives can be seen as a necessary development in the slipstream of the financialcrisisin2008,asraisingcapitalforstartaups,newventures,andprojectshasbecome moreandmorechallenging(debuysereet.al.2012). According to Mollick (2013) the concept of crowdfunding needs and deserves far more academicattentionthanithasreceivedupuntiltoday.literatureoncrowdfundingisstillin its nascent phase, and to several academics almost nonaexisting (Ordanini et. al. 2011; Belleflammeet.al.2013;Mollick2013).Thegrowinginterestofcrowdfundingshowninthe publicspherehastobetakenseriously, as crowdfunding is said to change the paradigm on traditionalfinancing,i.e.businessangles,venturecapital,andbankloans(lawton&marom 2010). Therefore, several academics acknowledge the importance of challenging crowdfundingasmorethanjustanewwayoffinancing(ordaniniet.al.2011;belleflammeet. al.2013;mollick2013).thus,researchoncrowdfundingisopen,andmanyroutesareworthy forinvestigation. 1http:// 5

7 1.2)The)Crowdfunding)Market) Tobetterunderstandtheimportanceofcrowdfunding,abriefoverviewofthemarketwillbe described.astudybylambertandschwienbacher(2010)indicatethatthemarketisstillin its initial phase; with most of the crowdfunding campaigns having taken place the past 3A4 years. Lambert and Schwienbacher s(2010) sample is widely scattered, containing cases in industriesragingfrominformationandcommunicationtechnologies(ict),sport,journalism, and movies, which make a more comprehensive view rather than focusing on specific categories. While some of the fundraising initiatives are basedon donations, around 80% appearedtooffersomeformofrewardinreturntotheindividuals,whichparticipatedinthe campaign.theserewardsincludetheissuanceofshares,directcashpayments,afreecopyof theproduct,andasimplecreditontheproduct(schwienbacher&lambert2010). In2012thecrowdfundingplatformsraised$2.7billionandsuccessfullyfundedmorethan1 million campaigns (Massolution 2013). Furthermore, Massolution (2013) forecasts that the volume in global crowdfunding will see an 81% increase in 2013, to $5.1 billion. Moreover, Massolution forecasts that this number will be doubled in 2014, to $10 US dollars. Furthermore, it number of platforms will also increase from 536 platforms in 2013 to 766 platformin2014,andoverathousandin2015. Figure(1( (Global(Crowdfunding(Market((Raised(funds/No.(of(Portals)( Source:Crowdvalley2014: 6

8 Furthermore, when exploring Google Trends one can see the increased awareness for crowdfunding. Starting in 2008 Google shows an increasing of queries from 2009 up until today.innovember2014onecanobservethehighestnumberofquerieseveri.e.thenumber 100representsthepeaksearchinterest. Figure(2(H(Google(Trend(Search("Crowdfunding"( Source: Yet,theemerginginterestoncrowdfundingshouldnotbefocusedonthegrowinginitiatives shown in the public media. Ongoing discussions about the potentialoften cease in polemic narratives,notcontributinganyvaluetounderstandingtheconceptitself(massolution2013). ) 7

9 1.2.1)Crowdfunding)Models) Withincrowdfunding there are four different funding models to raise capital. Furthermore, there are various regulations linked to the different types of funding models. A quick overview of the four different crowdfunding models will shed a light over the different choicesacreatorisfacedbeforecreatingacrowdfundingcampaign(seefigure3).( Type(of(crowdfunding( model( Donationmodel Lendingmodel Equitymodel Rewardbasedmodel How(it(works( Adonorcontractwithoutexistentialreward.Inthismodelthebackergive moneytoacauseheorshefindsinteresting.thisapproachisnotany differentthantraditionaldonationtocausessuchasnonaprofit organization,ngo s,politicalcampaigns,andothertypesofcharity. Acreditcontract.Creditisbeingrepaidplusinterest.Thiscrowdfunding modelissimilartoanytypicallendingscenario,whereindividualslend moneytoaprojectorcompanywiththeexpectationthatitwillberepaid.( Ashareholdingcontract,shares,equityAlikeinstrumentsorrevenue sharingintheproject/business.thismodelislinkedwithvarious regulationsandlawdependingwhatcountrythecreatorisdoinghisor hercrowdfunding.governmentsarestrugglingtomakelegalactions, whichwillbenefittheentrepreneurs. Apurchasecontractofferingsometypeofproductorserviceinreturn. Thismodelisthefastestgrowingfundingmodel.Thecreatorisableto giveawayvariousperksinreturnforcapital.theseperksmaybe prototypesofthefutureproduct,anykindofdifferentmerchandise,even ahighafive,orathankyounotetothebackers. Figure(3(H(Different(Types(of(Crowdfunding( Source:Owncreationbasedonwww.europecrowdfunding.org/2012/10/crowdfundingAmodel/ ) ) 8

10 1.2.2)Crowdfunding)Walkthrough) Tounderstandhowcrowdfundingworks,threekeyfactorsareinvolved.Thecrowdfounders+ are project owners/creators, i.e. entrepreneurs or individuals with a specific goal. The crowdfundersarethebackers,investors,lenders,donors,andbasicallyanyoneinterestedina project. The crowdfunding+ platforms work as intermediaries, e.g. Kickstarter or IndieGoGo. Figure4showsasketchofhowatypicalcrowdfundingcampaignworks. Onlineplatformsreceiveapplicationsfromprojectownerswhointendtoshowcasetheirbusinessideaorcauseonthe platform swebsite Theprojectowneristaskedwithcreatingafunding goaloveramarkedperiodoftimeandanonline pitch (mostofthetimesintheformofavideo),wheretheprojectowner pitcheshis/herideatopotentialfunders Duringthecampaigntheprojectownerwillkeephisfunders/fansupdatedabouttheprocesswithupdatesontheonline platform. Ifthefundinggoalisreachedwithintheallocatedfundraisingtimeframe,theprojectownerreceivesthemoney.Ifthefunding goalisnotreached,mostoftheplatformswillreimbursethemoneytothefunders. Intermsofpostinvestment,somefunderschoosetoremaininvolvedinthedecisionAmakingandoverallstrategyofthe business.somefundersreceivevotingrightsinthebusiness.inmostcasesthecommunicationbetweenthefundersandproject ownerswillcontinuethroughtheonlineplatform. Figure(4(H(How(a(typical(Crowdfunding(campaign(is(made.(( Source:OwncreationbasedonDeBuysereet.al.(2012) The crowdfunding platform usually serves as an intermediary between the crowdfounder and crowdfunder. The platform ensures that the crowdfounder asking for capital is not a fraudandcanbetrusted,whichmeansthatthepeoplebehindtheplatformsexamineallthe projectsbeforelaunchingthemontheplatforms.furthermore,thevariousplatformsallhave legalregulationsofwhatacrowdfounderisallowedtoofferinreturnforcapital 2,3. However, crowdfunding campaigns do not necessarily have to be on one of the numerous crowdfunding platforms available. Campaigns can also take place on other social media platforms, such as Facebook and on the entrepreneur s or company s own website 2https:// 3https:// 9

11 (Belleflammeet.al.2013) )Flexible)Funding)vs.)Fixed)Funding) Inpractice,therearetwotypesoffundingmethods:Theflexiblefundingmethod,alsocalled Keep5it5All 5model(KIA)andthefixedfundingmethod,alsoreferredtoasthe All5or5 Nothing Amodel(AON). IntheAONmodel,theentrepreneurialfirmssetacapitalraisinggoal,however,ifthegoalis notreachedwithinthefixedperiodoftimer(normallybetween30a60days),thefirmsdoes notkeepanyofthepledgefunds,andthecrowddoesnotgetanyreward.bycontrast,inthe KIAmodel,theentrepreneurialfirmscankeeptheentirepledgedamountfromthecrowd, whetherthesetgoalisreachedornot. AccordingtoCumminget.al.(2014)statethattheAONmodelisusedbytheentrepreneurial firmstosignaltothecrowdthattheyarecommittedtoonlyundertaketheprojectifthegoal isreached,whichisbelievedtoreducedthecrowd srisk.bycontrast,entrepreneursthatcan scaletheirprojectwillselectthekiamodel,i.e.aportionoftheplannedprojectisfeasible. However,thismodelmightindicatelesscommitmentfromtheentrepreneurs pointofview, andincreaseuncertaintyandriskfromthecrowd spointofview. Crowdfunding)Examples)&)Successes) Whentalkingaboutcrowdfundingsuccesses,onecannotavoidthePebblesmartwatch 4.The Pebble smart watch experienced remarkable attention in public media. The campaign launched on the crowdfunding platform Kickstarter in April 2012 set a funding goal of $ USdollarsin30days.However,nearly85.000backersgaveawayfinancialsupport endingupinafundingvolumeof$10.1millionusdollars,makingthepebblesmartwatchthe mostfinancedprojectonkickstarterinitshistory. Another, and more recent campaign, which also attracted a lot of media attention is the campaign made by Stone Brewing Co. The world famous Stone Brewing Company created a crowdfunding campaign on the platform IndieGoGo 5. Entrepreneurs, and increasingly small craftbeerentrepreneurs,areprogressivelyusingcrowdfundingplatformstoraisecapitalto 4https:// 5https:// 10

12 gettheir new breweries started. On Kickstarter alone there were twice the number of craft brew campaigns in the first six months of 2012 than the previously years combined 6. However,itwasthefirsttimethatalargecraftbeercompanylaunchedacampaign. In July 2014 Stone Brewing Co. announced their plans to open a new brewery in Berlin, Germany. The estimated $25 million US dollars project is the first of its kind, which means thatitisthefirsttimeanamericanbreweryopensabreweryoutsidetheus 7. The brewing giant turned to the crowdfunding platform IndieGoGo, an American based platform to create a campaign. The campaign indicated that individuals could participate in thenewventurebypurchasing/preabuyingspecialcollaborationbrews,whichhavenotbeen brewed yet. The money raised through the campaign would be used to expedite the constructionoftherestaurantandgardencomponentsofstone snewexpansionproject 8.The campaignstartedonjuly19 th 2014andclosedonAugust29 th 2014.Thecampaignwasmade asaflexiblefundingmodel,meaningthatwhetherornotstonebrewingco.wouldreachtheir goalof$1millionusdollarstheywouldreceivewhateverthecrowdwouldfund.onaugust 29 th at11.59pmstonebrewingco.managetogettheircampaignfundedby$ us dollarsby13.964backers,whichis253%morecomparedtotheiroriginalgoal.however,the success should be seen in the light of a really rough start on IndieGoGo, angry fans, angry people on IndieGoGo, and changing the campaign because it was perceived asgreed and panhandling 9. These two examples show the inherent power of the crowdfunding paradigm, bringing together creative and motivated people having ideas, and likewise enthusiastic people searchingfornewopportunitiesofinvestingtheirmoneyorsupportingother sideas. ) 6http:// 7http:// 8http:// 9http:// 11

13 1.3)Problem)Definition) Asmentionedabove,crowdfundingisaconceptundertakentoraisemoneyfornewprojects or ventures proposed by someone, by collecting small to mediumasize investments from severalotherpeople,i.e.acrowd(ordanini2009;kleemannet.al.2008;mollick2013;schenk & Guittard 2009; Schwienbacher & Larralde 2010), instead of using traditional institutions suchasanglecapital,venturecapital,andbanks(mollick2013). Usingalargecrowdtoraisecapitalisanotherstepinthe(r)evolutionofconsumerinteraction (Ordanini et. al. 2011). As seen in the marketing literature consumers have always had a special place.the role assigned to them has change dramatically over time, alongside with development in the marketing theory and the evolution of markets (Ordanini et. al. 2011). ConsumershavetransformedfrommeretargetstokeyinformationsourcestocoAproducers topartnersforinnovativepurposestokeyresourcesandcoacreators of value, and now to investment support, e.g. crowdfunding services (Ordanini et. al. 2011; Schwienbacher & Larralde 2010; Belleflamme et. al. 2013, Mollick 2013). Figure 5 shows the development of theconsumers roleinthemarketingliterature. Figure(5(H(The accumulation of roles played by consumers in marketing literature. Source:Ordaniniet.al.2011,p

14 ( Nascent)Studies)On)Crowdfunding) Existing literature on crowdfunding is, as mentioned, referred as being novel and nascent (Belleflamme et al. 2012; Larralde& Schwienbacher 2012). In addition, several articles and empiricalstudiesarestillconcernedwithinvestigatingthebasicprinciplesofcrowdfunding initiatives, including the various funding models, reward models, and the participants behavior within the crowdfunding processes (Mollick 2013; Belleflamme et. al. 2013, Cummingset.al.2014)justtonameafew.Moreover,thestudiesarecarriedoutinaspecific context like social projects, the music or film industry, or ventures from various domains (Kappel 2009; Hemer 2011; Ordanini et. al. 2011; Larralde & Schwienbacher 2012; Belleflamme&Lambert2014).Basedonbestpracticeexamples,researchisbeingconducted onwhatmightbedriversforsuccessfulcrowdfundingprojects. The)Power)Of)The)Internet) As it can be observed, modern technology influences every aspect of life. The Internet s ubiquityineverydaylifeenables individuals to be connected likenever before (Rubinton 2011). Applications of Web 2.0 allow individuals and companies to easily address, communicate,andinteractwithavastamountofpeoplesimultaneously. ItiswithinthesphereofWeb2.0applicationsthatcrowdfundinginitiativesplaceitself,asa way for entrepreneurs, etc. to connect with a vast amount of people (i.e. a crowd). Belleflamme et. al. (2013) state that crowdfunding can be used to promote products by encouragingconsumerstospreadinformationaboutnewideas,venture,orproductsonline. Belleflammeet.al.(2013)suggestthreeessentialmarketingfunctionsofcrowdfunding.These being:+marketresearch,+promotion,andengagement. The research presumes crowdfunding as a market research tool, since a crowdfunding campaignallowsreceivingfeedbackonagivenidea,venture,orproduct,aswellas,estimating thepotentialcustomerbase(belleflammeet.al.2013).moreover,crowdfundingcanbeused as promotion, as it offers free visibility for ideas or products. Crowdfunding initiatives may also create great engagement, as a company has the opportunity to offer rewards or give backersaspecialthankyou.furthermore,variousprojectsoffertheirbackerstheopportunity 13

15 to participate in the product design, voting rights, and testing. Consumer inputs allow the entrepreneurs to approve theproduct,andthrough that make it more attractive for the potential market. Gruner and Homburg (2000) found that interacting with potential customers in the development stages has been proven to have positive influence on the product sfuturesuccessrate. ( Market Research Figure(6(H(Crowdfunding(Marketing(Tools( Promotion Crowdfunding Marketing Tools Engagement ( ( ( ( ( ( ( ( Source:OwncreationbasedonBelleflammeet.al.2013 Pull)Stategy) Inthepast,marketerswouldfirstidentifysegmentsandcategorizethemdemographicallyor psychographically before launching products to the market space. Today crowdfunding has turnedthisapproachupsidedownbygivingbusinesses,entrepreneurs,andbrandstheability to market their product directly to customers long before the product is even produced by usingthesocialweb,whilegeneratingfundsforbusinesses.therefore,crowdfundingcanbe perceived as a pull strategy rather than push strategy, as it ensures an enthusiastic interest andengagementfromcustomersnormallythroughsocialmedia(cooper2014). Crowdfundinginitiativesbringcreators,i.e.entrepreneurs,andfunders,i.e.backers,together inacommonprojectbasedonwhatisrevealedabouttheprojectanditsparticipants.funders take on varying levels of involvement in the project, from relative distance to the right to participate in strategic decisionamaking.one of the main reasons why crowdfunding has become successful might be that people strive to associate with likeminded people and to formcommunities.brabham(2008)arguesthatcrowdfundingissimilartocrowdsourcing,as 14

16 it is build upon the creation of communities. Furthermore, Brabham (2013) states that the sense of belonging to a community is what draws people into supporting crowdfunding initiatives.therefore, may crowdfunding initiatives not only contribute to the realization of new projects but moreover, it also contributes to the culture that emerges from the relationshipsbetweencreators,funders,andcommunities(bannerman2013). Established)Companies)Take)On)The)Crowdfunding)Space) Established companies are starting to utilize crowdfunding initiatives. According to Dr. RichardSwart(2014),directorofresearchoncrowdfinanceatUCBerkeley,itisanewand growing trend for many corporations expressing: it s+ a+ natural+ evolution+ of+ how+ companies+ are+using+social+media+marketing.furthermore, companies+have+come+to+understand+that+the+ key+to+brand+engagement+and+brand+expansion+is+to+figure+out+how+to+create+deep+engagement+ in+social+media.+people+are+sort+of+turning+out+anything+that+looks+or+feels+like+a+message+from+a+ corporation Thequestionathandishowestablishedcompanieshavetheabilitytoutilizecrowdfunding initiativestosupporttheirsocialmediamarketingactivities. ) 10http:// crowdfun 15

17 1.4)Research)Question) As crowdfunding initiatives can be seen as a marketing tool, research on utilizing crowdfunding to building longaterm relationships with customers might be an important factor in a company s marketing strategy; hence a successful crowdfunding campaign may create a strong online community. Moreover, as mentionedabove, companies withalready established customer bases and online communities are starting to launch crowdfunding campaignstocommunicateandengagewithexistingandpotentialcustomers. BasedonsuchargumentsthestudyaimstoanswerthefollowingresearchquestionandsubA questions RQ:( How( can( an( established( company s( social( media( activities( support( crowdfunding( initiatives( to( increase( customer( engagement,( with( the( help( of( social( Customer( Relationship(Management(and(Relationship(Marketing?( A A A How(is(Mikkeller(currently(using(social(media?( What(are(Mikkeller s(main(drivers(to(facilitate(crowdfunding(initiative?( What( conditions( should( be( in( place( in( a( company,( like( Mikkeller,( in( order( to( make(sufficient(use(of(a(crowdfunding(campaign?( ( 1.5)Study)Setting) This study aims to investigate the concept of using crowdfunding initiatives in established companies. This studypaysspecialattentiontoone organization, which is determined to make a crowdfunding campaign to increase customer engagement, and get more brand ambassadors. Morespecificallythisstudyisinterestedininvestigatingtheunderlyingfactorsthatdrivesthe brewing company Mikkeller ApS to facilitate crowdfunding initiatives. Having this in mind, this study will integrate several literature streams; use expert insights, secondary data, and makeuseofaqualitativecasestudyofmikkeller,inordertounderstandthevariousbenefits and possible pitfalls crowdfunding might have on established companies. Furthermore, this study will also investigate why established companies are entering the crowdfunding space 16

18 andhowtheycanbenefitfromcrowdfundinginitiativesandcreatevaluefortheirbusinesses afteracampaign. 1.6)Scope)&)Delimitation) The scope of the research is limited to understanding the drivers behind customer engagement through social media platforms. Moreover, the case study performed focus on oneindustry,thefastamovingaconsumeragoods,i.e.thecraftbeerindustry.thereasonisthat thecraftbeerindustryconsistofmanysmallercompanies,whichallhaverelativelylargefan bases. This means that people have to know about the brewery to be able to become a fan. Normally, microbreweries do not use advertising as larger companies, which means that microbreweriesrelyonwordaofamouthandtheirfollowersonsocialmedia.furthermore,this studyfocusesonestablishedcompanies,i.e.smallandmediumasizeenterprises(smes),and will nottakelargeascale corporations intoaccountthat have whole divisions of marketing, R&D,andcustomerservice. IntermsofcrowdfundingmodelsIwillonlyfocusonrewardAbasedcrowdfunding,sincethe other models of crowdfunding e.g. the equity Aandlending models consist of some kind of return on investment to the backers. These models are still not fully legal in Denmark, and sincemicrobreweriesareindependentlyowned,theyhavenointerestofselling shares tothe public.therefore, the conclusions drawn might not relate to companiesinotherindustries, although conclusions from this research might in some cases be suggestive for other industries. The research does not intend to cover all aspects of customer engagement, relationship marketing,orsocialcustomerrelationshipmanagement(socialcrm),asthescopewouldbe far too extensive. The perspective taken in this research is broad, introducing a number of aspects concerned with crowdfunding initiatives, customer engagement, and relationship management,whichindicatethatthedepthoftheanalysisisstrained. As mentioned above, the research on crowdfunding has so far been extremely limited regardingtheconnectionbetweencrowdfundinginitiativesandsocialmediamarketing,and thus I believe a broad perspective is necessary. Furthermore, as the research is based on interviewstheconclusionsdrawnaredependentontheirpersonalviewpoints. 17

19 2.)Methodology) Themethodologicalchoicesofthisstudyaimstoconstructaguidelineofthechosenresearch design. Furthermore, this chapter will provide the reader with an overview of the methodologicalimplicationsandissuesregardingtheresearchdesign. A research design provides a framework and overall plan for the collection and analysis of data that is required to answer the research question (Bryman 2012). Thefunctionofa researchdesignistoensurethattheevidenceobtainedenablestheresearchertoanswerthe initialquestionasunambiguouslyaspossible (DeVaus2001,p.9).Inotherwords,aresearch designistheplanofhowtheresearcherwillgatherinformation,andwhichtechniqueswillbe used for analyzing the information, in order to answer the research question the study focuses on. This means that the research design will have a profound influence on the outcome of the research. It is known that the choice of research design reflects decisions abouttheprioritybeinggiven,toarangeofdimensionsoftheresearchprocess. 2.1)Choosing)The)Right)Research)Design) According to Ghauri and Grønhaug (2005) there are three main classes of research design: exploratory, descriptive, and causal design, and determining which class is relevant for a researchdependsontheproblemstructure. Idecidedtouseanexploratoryresearchdesignforseveralreasons.Firstly,thenatureofmy topicisdynamic,meaningthatwhilereadingandcollectingarticlesandworkingpapers,new articlesgotavailable.furthermore,crowdfundingisbasedonrelativelynewtechnologiesand trends,whichareinconstantdevelopmenttheseyears.secondly,upuntiltodaytherehasnot beenmuchempiricalandconceptualresearchdoneonthetopic.althoughthecrowdfunding platforms have been known for some years, as well as consumer behavior, donor behavior, andcustomerengagementhavebeenresearchconsiderably,thequestioniproposeislacking from the literature. Thirdly, the issue of my research has a complexity; thus crowdfunding initiatives have multiple factors, which need to be investigated and understood more thoroughly. In conclusion, I selected an exploratory approach, aiming to investigate the benefitscrowdfundinginitiativemightproducetoestablishedcompanies,andwhatrisksare connectedtocrowdfunding. 18

20 When conducting an exploratory research, the methodology literature suggests different sources of knowledge and methods for acquiring information e.g. literature search, interviewing experts, and conducting focus group interviews (Saunders et. al. 2009). My exploratoryresearchwasdonebyliteraturesearchandinterviewingexperts.theaimofthe literaturereviewwastogainadeeperknowledgeonthetopic,anddevelopquestions,which hopefully could be answered with the help of the empirical research. At first, I interviewed experts working with fundraising and crowdfunding. Moreover, I interviewed an expert workingwithcrowdfundingresearchattheuniversityofaarhus,denmark.theinsightsfrom the experts provided me with a deeper understanding on how crowdfunding is being used andthepotentials of crowdfunding. Secondly, I interviewed the Operational manager from Mikkeller in order to gain insights of their social media activities and decisionamaking processes.thefocusoftheresearchwasinitiallybroad,asanexploratoryresearchoftenis (Bryman2012).However,astheresearchadvanceditbecamenarrower. 2.2)Methodological)Implications) Thefollowingpartswillpresentmethodologicaldecisionsforthisstudy.Furthermore,these partswillinclude:criteriainsocialscience,methodologicalorientations,andresearchdesign )Criteria)In)Social)Research) Beforegoingindepth,threeprominentcriteriafortheevaluationofsocialresearchhavetobe illuminated,namelyreliability,+replication,+andvalidity. Reliabilityhastodowiththequalityofmeasurement.Initseverydaysense,reliabilityisthe consistencyofmeasuresinagivenresearchdesign(bryman2012). Replication+ is closely related to reliability, hence, researches sometimes choose to replicate thefindingsofothers.thereasonsforreplicationofastudymayemanatefromfeelingsthat the original results do not match other evidence that is relevant to the domain in question (Bryman 2012). To replicate a study must be capable of replication; this means that if a researcher does not spell out procedures in great detail, replications is impossible. Consequently, replications in social science is not common, thus many researchers tend to resist replication because of this. Burawoy (2003) states that in academia the real reward comesnotfromreplicationbutfromoriginality. 19

21 Validity+isconcernedwiththeintegrityoftheconclusionsthataregeneratedformaresearch. Validity has a great impact in quantitative research referred to as Measurement+ validity.+ Basically, it has to do with the question of whether a measure that is devised of a concept reallydoesreflecttheconceptthatitissupposedtobedenoting(bryman2012).anothertype of validity is Internal+ validity. Internal validity is concerned primarily with the question of whetheraconclusionthatincorporatesacausalrelationshipbetweentwoormorevariables holds water. The issues of causality refer to the factor that has a causal impact as the independentvariableandtheeffectasthedependentvariable.overall,internalvalidityraises thequestion:howconfidantcanwebethattheindependentvariablereallyisatleastinpart responsible for the variation that has been identified in the dependent variable (Bryman 2012). Thirdly, validity also addresses External+ validity.+ External validity deals with the question of whether the results of a study can be generalized beyond the specific research context. Moreover, a study is seen as not externally valid if it would only apply to the respondents alone. On the other hand, if it is externally valid, we would expect it to apply moregenerallytothepopulation(bryman2012).lastly,ecological+validity+isfocusedonthe notion whether social scientific findings are applicable to people s everyday, natural social settings.thiscriterionisconcernedwiththequestionofwhethersocialresearchsometimes produces finding that may be technically valid but have little to do with what happens in people severydaylives(bryman2012) )Epistemological)&)Ontological)Orientation) ( AccordingtoCreswell(2003),thephilosophicalassumption,termedworldvieworparadigms, whichtheresearchersbringtothestudyneedtobeidentifiedastheyinfluencethepracticeof the research. These assumptions refer to the general orientation about the world and the natureofresearch.( DaymonandHolloway(2002)definetwodominantworldviewsinsocialscienceresearch:the interpretiveandtherealist.thesetwoworldviewsarecontrasting.therealistviewassumes thatrealityisobjectiveandthatresearcherscanexplainrealitybygatheringlargeamountof data and thus drawing assumptions based on regularities of the data. Contrasting, the interpretive view is subjective and concerns+ itself+ with+ exploring+ the+ way+ that+ people+ make+ sense+of+their+social+worlds+and+how+they+express+these+understandings+through+language,+sound,+ imagery,+ personal+ style,+ and+ social+ rituals (Daymon & Holloway 2002, p.4). It provides 20

22 researchers with the opportunity of gaining deeper understanding of their subjects by exploringthemotivationsandintentions.theinterpretiveresearchdemandstheresearcher toactivelybeinginvolved,i.e.makeuseofqualitativeresearch.ontheotherhand,therealist viewismorerelatedtoquantitativeresearch. The nature of this study is build upon an interpretative view, i.e. a qualitative research strategy, as it is+based+upon+the+view+that+a+strategy+is+required+that+respects+the+differences+ between+ people+ and+ the+ objects+ of+ the+ natural+ science+ and+ therefore+ requires+ the+ subjective+ meaning+of+social+action (Bryman2012,p.30). Ibelievethatbygaininginformationthroughqualitativedatawillprovidemewithadeeper knowledgeandunderstandingoftheissues,thanbydrawingconclusionbasedonregularities inlargeamountofdata )Inductive,)Deductive)&)Abductive)Reasoning) Reasoning+is+the+process+of+using+existing+knowledge+to+draw+conclusions,+make+ predictions,+ or+ construct+ explanations.+ Three+ methods+ of+ reasoning+ are+ the+ deductive,+inductive,+and+abductive+approaches (ButteCollege2014).+ The inductive approach is when a researcher starts out with a number of single cases, observesapatternformandgeneralizesbasedonthatpatternawhileadeductiveapproach proceeds from a general rule and explains a single case through this rule (Alvesson & Sköldberg2009). The abductive approach is a mixture of inductive and deductive approach; like induction it takes a point of departure from the empirical basis, but does not reject theoretical preconceptions(liketheinductiveapproachdoes)andisinthatrespectclosertodeduction. The abductive approach provides the chance of preceding the analysis of the empirical researchwithprevioustheoreticalstudiesintheliterature,whichcanactasinspirationsfor the discovery of patterns that bring understanding (Alvesson & Sköldberg 2009, p. 4). Abductive reasoning provides a deeper perception of the research issues because of its inclusion of understanding, whereas induction and deduction are shallower approaches (Alvesson&Sköldberg2009,p.4). 21

23 Figure(7(H(Three(forms(of(logic( Source: InthisstudyIwillmakeuseofanabductivereasoning;henceabductionisthelogicusedto construct descriptions and explanations, which aregroundedintheeverydayactivitiesof, social actors 11. The conditions of this approach are well connected with the focus in this paper )Research)Design) Thisstudywillmakeuseofacasestudydesign.Therearevariousreasonsforchoosingacase study.firstly,thismethodenablestheresearchertogainaholisticviewofthetopic,providing aclearerpicturegiventhedifferentsourcesofevidenceused.secondly,acasestudyisuseful incapturingtheemergentandimmanentpropertiesofaninstablecontext,e.g.crowdfunding, whichseemstochangerapidly.thirdly,asthisstudyisanexploratoryanalysis,wheretheaim istoprovideandconcludeona how question,whichaimtoexplainacertainphenomenon,a casestudyismoresuitablethanothertypesofresearchdesigns(yin2003).furthermore,the aim is to provide information in order to gain new knowledge. Lastly, a case study allows generalizations of the findings, which can lead to the understanding of causality (Bryman 2012). Theproceduralcharacteristicsinacasestudyarebuiltontakingintoaccountthatthereare many variables of interest, multiple sources of evidence, as well as transversal theoretical 11http://srmo.sagepub.com/view/theAsageAencyclopediaAofAsocialAscienceAresearchAmethods/n1.xml 22

24 propositionstoguidethecollectionandanalysisofdata (Yin 2003).The overall quality of usingcasestudiesbasedonmultiplesourcesofevidencehaveproventoberatedhigherthan thosethatreliedonasinglesourceofinformation(yin2003).thus,thisreflectspositivelyon thevalidityofthequalitativedataprovidedinthisstudy. 2.3)Data)Collection) ThefollowingsectionsdiscusshowIperformedmydatacollection,whichissuesIfocusedon andhowandwhythedatasourceswerefoundtoberelevanttomyresearch. I used primary data, consisting of the interviews I performed and observations as well as secondary data. The primary data used in the research consists of the interviews that I conducted in October and November In total I interviewed four individuals, all with different backgrounds and motivations,whichibelievebringvaluetotheresearch,asthe informationgaineddoesnotcomefromonenarrowsource.theinterviewswereconducted viafaceatoaface,viaskype,and . As this study is a qualitative research a triangulated research strategy is commonly used. Triangulationinsocialscienceisoftenusedtoindicatethatdifferentmethodsandsourcesare usedinordertochecktheresults. Triangulation is a powerful technique, which facilitates validation of data through cross verificationfromtwoormoresources.whenusingmultipleobservers,theories,methods,and empiricaldataresearcheshopetoovercomeeventualweaknessorintrinsicbiases(yin2003). Additionally, any case study findings are likely to be more conclusive and accurate,when basedonseveralsourcesofdata(yin2003). For the purpose of this research, data related to the topic was collected using CBS library bothonlineandphysical,exploitingtheonlinedatabaseandbookshelves.internetsearchwas conducted to get access to books, academic journals, and articles relevant to the topic. Furthermore, literature was identified and fetched through various Internet sources, social 23

25 media tools, which have been an inevitable source of information during all stages of the researchprocess )Case)Study) According to Yin (1994), a case study is: + an+ empirical+ inquiry+ that+ investigates+ a+ contemporary+phenomenon+within+its+real5life+context,+especially+when+boundaries+between+the+ phenomenon+ and+ the+ context+ are+ not+ clearly+ evident + (p.13). A case study is applicable in situations where the researcher wants to study individuals, group, organization, social, political, and related phenomena (Yin 1994). Moreover, case studies are argued to be a relevantstrategywhentheresearcherhaslittlecontroloverevents.casestudiesarealsosaid tobeapplicableforstudyingunexplored,emergingfields,andthusviablesourcesofevidence forthedevelopmentoftheoreticalimplications(yin1994) )Selecting)The)Case) Giventhenoveltyandthecircumstancesofthisstudyitrequiresacarefulselectionofthecase toinvestigate.theresearchincludesanempiricalstudyofonecompany,whichisdetermined ofutilizingcrowdfundingasatooltobuildrelationshipsandintegratetheircustomersinthe company,inordertosupporttheirsocialmediamarketing. The case company is Mikkeller ApS, a Danish micro brewing company, which has become a successfulcompanyworldwide.althoughthecompanyhasover40.000peoplewholikethem onfacebookmikkellerwantstoengagemorewiththeirfollowers/customersandmakethem ambassadorsforthecompany. Followingargumentationsexplaintherationalebehindchoosingthisparticularcaseforthe study. In my daily life working in the craft beer industry I see microbreweries working intensely with social media as their primary marketing channel. Working at Mikkeller ApS it came to my knowledge that they were in the very early stage of thinking about launching a crowdfunding campaign. I instantaneously saw a match; working with crowdfunding in practice while writing my master s thesis about crowdfunding. Furthermore, I found that thereonlywerelimitedstudiesfocusedoncrowdfunding,andespeciallythemarketingaspect 24

26 ofit.moreover,mystudyprogramstrategicmarketcreationfocusesonmarketing,business development,andinnovation. AlltheaboveAmentionedfeaturesguidedmetoconnectcrowdfundingtogetherwithvarious theoriesandconcepts.moreover,crowdfundinginitiativescreatedbyestablishedcompanies have not been studied thoroughly, which triggered me to investigate how established companiesmightbenefitfromcrowdfundinginitiatives.therefore,ifindthetopicrelevantto mystudyprogram,asitconnectsvariousconceptsfrommycurriculum )Interviews) Interviewshavebeenconductedandusedtocollectdata,whichwillbeusedintheanalysis. TheintervieweeshavebeenselectedbysearchingtheInternettofindpeople/companieswho haveusedcrowdfunding,andtofindpeopleconsideredaspeoplewithspecialknowledgein the field of crowdfunding. According to Daymon and Holloway (2002) the important attributesofinterviewsarethatareflexibleandallowonetounderstandtheperspectivesof interviewees. Case)Company)Interview) I interviewed one employee from Mikkeller, Operations Manager Jacob Gram Alsing (AppendixI),whoisworkingwithallpartsofthecompany.Currentlyworkingwiththeirnew venture,whichwillbefundedbythecrowd. TheinterviewwasconductedinordertogainadeeperinsightintoMikkeller ssocialmedia marketing. Furthermore, I wanted to gain knowledge why Mikkeller has decided to use crowdfunding initiatives to support their business, what Mikkeller sees as the greatest potential within their companies for using these initiatives, and if they have discovered or seenanyhindrances. Interviews)With)Experts) Iconductedinterviewswithexpertsrangingfromassistantprofessorstoaseniordirectorof outreach from the crowdfunding platform IndieGoGo. This provided me with different perspectivesofknowledgeaboutthesubjectofhowtheplatformscanbeused,howtheyare currently used, and which possibilities they present for the companies. The experts have different backgrounds and knowledge; hence, contributing with divergent expertise to the 25

27 research. Jan Warhuus is an assistant professor at Aarhus University (Appendix II). He is currently workinganalyticalwithcrowdfunding,andhasheldseverallecturesandtalksonthetopic. I also interviewed Dennis Hørmann (Appendix III), who specializes in fundraising. He is a partner at Fundraiseren.dk, which consists of Rasmus Munch and Dennis Hørmann. Dennis Hørmann is a candidate skilled in communication and economics and has additional continuing education in fundraising, sponsorship and project management as well as many yearsofexperienceinfundraisingandprojectdevelopment.dennishørmannhasbeenused asanexpertinseveraldanishpapersregardingcrowdfunding. Moreover,IinterviewedJohnVaskis(AppendixIV),whoisaseniordirectorofoutreach.John Vaskis has helped several startaups with their crowdfunding campaigns. Recently he has assistedstonebrewingco.withtheircrowdfundingcampaign(mentionedintheintroduction chapter) 2.3.4)Secondary)Data) The secondary data is basically other researchers data and/or research papers(daymon& Holloway2002),whichIanalyzedinlightofmyownresearchtopic.Myprocessbeganwith collecting and reading articles about crowdfunding. These articles led me to other articles, questionaboutthetopic,andinterestingpathstogo.isearchedthecbslibrarydatabaseas well as Google Scholar for articles, books, and working papers using key words such as crowdfunding success, crowdfunding mistakes, crowdfunding and community, crowdfunding and marketing, crowdfunding and social media, crowdfunding and customerengagement, crowdfundingandorganizationallegitimacy,and socialmediaand customer relationship management. I aimed to include articles, which had been referenced widelyinmyselection;however,someveryrecentarticleswereofgreatinterestduetothe scopeofthearticlesandmyresearchquestion.furthermore,thesecondarydataturnedoutto beavaluablesourcetothestudyduetothenoveltyofmystudy. 26

28 2.4)Limitations)Of)The)Data)Collection) This part will uncover various obstacle and limitations, which I faced in all stages of my research. Furthermore, the limitations forced me to make unforeseen modifications throughouttheresearch. InthisstudyIfacedsomeobstacles,whichmademechangemyscopeseveraltimes.Initially, the scope of the thesis was to make use of a netnographic study on Mikkeller and Stone Brewing Co. crowdfunding campaigns. However, due to unforeseen obstacles Mikkeller postponed their crowdfunding campaign (which is still not launched), moreover, data from StoneBrewingCo. scrowdfundingcampaignwasdifficulttofetch.secondly,themainobstacle wasthatthemajorityofthepeopleiwantedtointerviewturneddownmyrequest,andothers didnotreturnmyrequestatall.someofthecompaniesicontactedclaimedthattheydidnot havethenecessaryresourcesortimetoprovidemewithinformation.somedidnotwantto comment, or provide me information about their crowdfunding initiatives. A total of 20 peopleandcompaniesicontactedonlythreereturnedwithapositiveanswer.furthermore, othercompaniesreturnedwithlinkstoblogsandwebsites,andclaimedthatinformationwas already available. Some of the experts I contacted indicated that there is still a lot to be learned, and that data or knowledge about why established companies are starting to use crowdfundinginitiativesarenotyetavailableortosomeextendnoteventhoughtof. ) 27

29 3.)Literature)Review)&)Theoretical)Framework) This chapter will present the already existing literature on crowdfunding. Moreover, this chapter will guide the reader through the literature by using existing literature on crowdfundingandconnectitwithseveralliteraturestreamsthatcansupportcrowdfunding initiatives. Furthermore, this chapter will investigate other literature streams, which may havetheabilitytosupportcompaniesfacilitatingcrowdfunding. 3.1)The)Rise)Of)Crowdfunding) Crowdfundingasastateofmindisnotanewphenomenon;hencedonationforcharitycanbe viewed as crowdfunding, and this approach has been known for many decades. However, crowdfunding as a business tool is claimed to be novel. As mentioned in the introduction chapter crowdfunding is a method, which can be used to raise capital through the Internet. Because of its remarkable success several authors have begun to investigate this novel financingmethod.however,accordingtomollick(2013)therehasbeenverylittlepublished peerareviewedworktodateonthetopic. The rise of crowdfunding as a new method to raise capital can be seen as a subdivision originated in the slipstream of the financial crises(de Buysere et. al. 2012). This statement arisesfromthefactthatraisingcapitalfromtraditionalsourcese.g.businessangles,venture capital, bank loan, and etc. has become more and more difficult for new ventures but also establishedbusinesses.manyentrepreneursfindcrowdfundingattractivebecauseithelpsto reducetheriskofunderfundingaproject;hence,entrepreneursmayutilizecrowdfundingas an innovative capital management mechanism to avoid earlyastage capital gaps by prea fundingproductionandsales(harrison2013). Crowdfunding)Definition) SchwienbacherandLarralde(2010)proposedoneofthefirstdefinitionsofcrowdfunding: + crowdfunding+ is+ the+ financing+ of+ a+ project+ or+ a+ venture+ by+ a+ group+ of+ individuals+ instead+ of+ professional+ parties+ (like,+ for+ instance,+ banks,+ venture+ capitalists+or+business+angels) (p.4). 28

30 However, a few years later Belleflamme et. al. (2012) came with a clearer definition. They definecrowdfundingas: An+open+call,+mostly+through+the+Internet,+for+the+provision+of+financial+resources+ either+in+form+of+donation+or+in+exchange+for+the+future+product+or+some+form+of+ reward+and/or+voting+rights +(p.8).+ Crowdfunding hereby positions itself as a preamarket service, which entrepreneurs may utilize to generate capital, and at the same reduce risks associated with traditional funding methods. However, crowdfunding is a concept build upon various literature streams. These willbeidentifiedinthefollowingparts. 3.2)The)Roots)Of)Crowdfunding) Tobeabletounderstandcrowdfundingmorethoroughlyitisbeneficialtotakecrowdfunding oneastep back. The academic literature on crowdfunding is to some researchers largely inexistent(schwienbacher& Larralde 2010; Ordanini et. al. 2011; Belleflamme et. al. 2012; Mollick2013).Therefore,tobetterunderstandthephenomenon,itneedstobeaddressedasa partofseveralliteraturestreams.thevariousliteraturestreamswillbehelpfultoprovidean appropriate setting for understanding the concept of crowdfunding. Although, insights from thevariousliteraturestreamsonlyaddresssomeaspectsofcrowdfunding,itwillprovidethis thesiswithaclearerunderstandingoftheconcept )Web)2.0) TheemergenceofWeb2.0hasmadeiteasiertocommunicateandinteractwithindividualsall over the world simultaneously. The developments of Web 2.0 applications are critical features, and have facilitated easy access to the crowd (Brabham 2008; Kleemann et. al. 2008). Web 2.0 is defined as a WebAasAparticipationAplatform that enables interaction betweenusers(o Reilly2007).ThefeaturesofWeb2.0arecrucialforentrepreneurstobe able to easily reach networks of investors or consumers (Belleflamme et. al. 2010). The importance of efficient communication and networking is claimed to be an essential componentofanycrowdfundingprocess(larralde&schwienbacher2010). InastudybyLeeet.al.(2008)theyidentifythreeimportantpropertiesofWeb2.0:openness, 29

31 collaboration, and participation. Furthermore, Lee et. al. (2008) claim that Web 2.0 technologies allow users to provide content, interact with each other, and thereby create valueforthecompany. Additionally, Hemer (2011) recommends adding two features of Web 2.0, namely the functionsofviral+networking+and+marketing.+theseadditionsallowmobilizingagreatnumber of users in specific web communities, within a relatively short period of time. According to Gladwell(2010)theInternet,andespeciallyWeb2.0is: + terrific+ at+ the+ diffusion+ of+ innovation,+ interdisciplinary+ collaboration,+ [and]+ seamlessly+matching+up+buyers+and+sellers. 12 However,thetiescreatedthroughonlineplatformsarerelativelyweak(Gladwell2010).Itis argued that collective action by online crowds may be unstable, may individualize risk, and mayremovethedegreeofpersonalorcommunityinvolvement,whichcanmakeactiononthe partoffundersmeaningful(gladwell2010).althoughweb2.0applicationshaveasignificant impactoncrowdfundingthereareotherliteraturestreams,whichcanhelpunderstandingthe variouslayersofcrowdfundingmechanisms )Crowdsourcing,)Open)Source,)Open)Innovation,)Lead)Users)&)User)Innovation) Literatureonopensource(LakhaniandvonHippel2003)andcrowdsourcing(Kleemannet. al. 2008) may also enhance the knowledge on crowdfunding. In an open source scenery, productionanddevelopmentaspectsofofferingsare outsourced topotentiallymanypeople whofreelyaregivenaccesstothegivensourcematerial(vonkroghandspaeth2007).ina crowdsourcingsettingajobisalso outsourced intheformofanopencalltoalargepoolof people (Howe 2006; Brabham 2008; Brabham 2013). The central theme is that, in both settings,acrowdofpeoplecollaborativelycontributestotheproductionprocessorsolution toadesignissueorproblem.leimeisteret.al.(2009)suggestthatcrowdparticipationinboth open source and crowdsourcing are motivated by learning, direct communication, selfa promoting, and social benefits. Moreover, some people participating in crowdsourcing are also driven by the monetary rewards obtainable if winning the contest(schenk& Guittard 2009). Unlike open source and crowdsourcing,participants of crowdfunding arenotonly 12http:// 30

32 contributing with knowledge and effort but also play promotional and investment roles in supportoftheinitiativesbeingcrowdfunded;thusparticipantsarelikelytobedrivenbyother typesofmotivations(ordaniniet.al.2011;gerberet.al.2012;mollick2013),suchasfeelings, andbelongingtoagreatercause. Otherliteraturestreams,whichadditionallyofferinsightsinthefieldofcrowdfunding,arethe theoriesonleadusersandopeninnovation(vonhippel1986;chesbrough2003).thesetwo theories focus on customer involvement in developing new offerings intended for other customers.thefundamentalmindsetisthatsomeusershavetheabilitytoanticipateneeds longbeforetheofferingsendsinthemarketplace,andthatfirmscancapitalizeonsuchlead userssenseofinnovationandexpertise,indevelopingpotentialsuccessfulnewproducts(von Hippel& Katz 2002). The idea of having lead users is important, however also scarce. Lead users may be difficult to uncover and to implement in organizations,howeverleadusers reflectsomecharacteristicsofparticipantsincrowdfundinginitiatives,suchasscoutingand screeningofinterestingproductsorideasseekingfunds(lilianet.al.2002).unlikeleadusers crowdfunding builds upon the idea that a relatively large number of people participate in decidingwhatshouldbeofferedtothemarket(ordaniniet.al.2011). Asseensofar,oneofthemaincharacteristicsofcrowdfundingisparticipation.Asseeninthe introduction Ordaniniet. al. (2011) emphasize that customers have become active players, whencompaniesaretolaunchnewproductstothemarket.thiscanbeexplainedbylooking attheservicemarketingliterature )Service)Marketing)) In the service marketing literature the customers role has always been of great interest in serviceprovision(bitneret.al.1997;blazevicandlievans2008).theservicedeliveryalways includes a certain degree of customer participation, to which extent involves providing information to the service organization, or even more direct involvement in the service provision itself (Fang 2008). As customeraparticipation may contribute to better customization,improvedexperience,andtosomedegreegreaterefficiency,italsohassome weaknesses for consumers. This may be increased uncertainty and responsibility over the outcome (Bendapudi and Leone 2003). Customer participation is highly relevant to crowdfundingbecausethecustomersinvolvedincrowdfundingarenotmerelyintegratedin 31

33 the service delivery phase, but additionally, contribute to the design and set up the entire crowdfundingoffering(moeller2008).still,oneofcrowdfunding sinitialanddistinguishing characters is that customers are the key actors who make possible thegenerationofthe offering. This means that customers play a vital part with their evaluative decisions and financial support (Ordanini et. al. 2011). Moreover, while the service-marketing theory focuses on contexts where the individuals participating in the service provision and in consuming the service are the same; in crowdfunding the customer-participants help in developing an offering, i.e. funding, that is later consumed by others (Ordaniniet.al.2011) )Brand)Communities) Ascrowdfundingbuildsuponvariousfactorsofcommitmentandcollaboration,itisvaluable toemphasizetheliteratureonbrandcommunities,whichsuggestssomefeaturesthatrelate tocrowdfundingcontexts. Theliteraturesuggeststhatconsumers,whoareintenselyinvolvedwithabrandthatoffers symbolic benefits, can develop+ a+ common+ understanding+ of+ a+ shared+ identity + (Muñiz and O Guinn2001,p.413).BagozziandDholakia(2006)proposethatbrandAcommunitymembers aretypicallymotivatedbyfun,learning,identification,andstatus,especiallywhentheactivity issharedinsocialnetworks.itissuggestedthatindividualsmayuseonlinecommunitiesto generate a+process+of+collective+value+creation (Schauetal.,2009,p.30).Still,theliteratureon brandcommunity does not take monetary support from users into account,whichisakey element of crowdfunding models. However, there are literature streams, which take the monetarysupportintoaccount,e.g.donorbehaviorandmicrofinance )Donor)Behavior)&)Microfinance) Theliteratureondonorbehaviortakesmonetarysupportintoaccount(KotlerandAndreasen 1991).WhiteandPeloza(2009)proposethatthemotivationalfactorsinvolvedincharitable causesareselfaesteem,publicrecognition,satisfactionofexpressinggratitudeforone sown wellbeing, and relief from feeling guilt and obligation. Moreover, the literature on microfinancehighlightstheroleofcrowdsintryingtosustainsmallprojectshavingasocial meaning(rutherford 2000). Still, these literature streams focus solely on donors motivated by nonaeconomic benefits. This means that this literature is not capable of explaining the majority of crowdfunding initiatives, which involve monetary payoffs and risks for the 32

34 participants(ordaniniet.al.2011) )Service)Dominant)Logic)&)Social)Capital) Furthermore, the emerging Service Dominant Logic (SDL) has introduced the idea that consumersareconsideredasresourceintegratorsinservicesystems,thusextendingtherole ofconsumersintheservicevaluenetwork(vargo&lusch2008).still,eventhemostrecent contributionsofsdldonotconsidertheconsumerasanactorinvaluenetworksbyvirtueof their investment activities (Lusch et. al. 2010). However, the literature on social capital contributestothegeneralunderstandingofcrowdfundinginitiatives.socialcapitalisdefined as: The+ sum+ of+ the+ actual+ and+ potential+ resources+ embedded+ within,+ available+ through,+and+derived+from+the+network+of+relationships+possessed+by+an+individual+ or+social+unit.+social+capital+thus+comprises+both+the+network+and+the+assets+that+ may+be+mobilized+through+that+network (NahapietandGhoshal1998,p.243). Harpham et. al. (2002) categorize social capital into four general categories: 1. Collective+ efficacy;+2.+social+trust+and+reciprocity;3.+participation+in+voluntary+organizations,+and4.social+ integration. Social capital is seen as an intangible resource, which is held both at the individuallevelandrelatedtopersonalformalandinformalrelationshipsandtrust,andatthe collectivelevel,e.g.withinagrouporaterritory(harphamet.al.2002). DavidssonandHonig(2003)showthatbridgingandbondingsocialcapital,consistingofboth strong and weak ties, was a robust predictor for nascent entrepreneurs, as well as for advancing through the startaup process. However, with regard to outcomes like first sale or showingaprofit,theonlyaspectofsocialcapital,thatbeingamemberofabusinessnetwork, had a statistically significant positive effect. The study by Davidson and Honig (2003) supports human capital in predicting entry into nascent entrepreneurship, but only weakly forcarryingthestartaupprocesstowardssuccessfulcompletion. Theliteraturestreamsallprovidesomeimplicationstobetterunderstandthemanylayersof crowdfunding. However, some of them only contributed with knowledge about customera participation, and some only to added knowledge regarding startaups, and nonaeconomic benefits. To better understand motivational factors from the entrepreneurs point of view, 33

35 and especially in regards to established companies, the following parts will take other literature, frameworks, and theories into account. These parts will provide this study with knowledgetobetteransweringtheresearchquestionproposed. 3.3)Motivational)Dynamics)Of)Crowdfunding) The literatureoncrowdfundinghas focused intensely on motivational factors, mostly from thebackers pointofview;hencescholarstrytounderstandthedifferentdynamicsinvolved whenanonymouscontributorsdecidetofundnewventures(gerberet.al.2012).moreover, thereisalsoagreatinterestofinvestigatingandunderstandingthemotivationalfactorsfrom theentrepreneurs pointofview;henceraisingmoneytogetanewbusinessstartedmightbe the main purpose, however, other factors such as market research, promotion, and engagementarealsosignificanttobusinessesandentrepreneurs(belleflammeet.al.2012;de Buysereet.al.2012) )The)Entrepreneurs )Motivational)Dynamics) Creatingacrowdfundingcampaignmayprimarilybeseenasawaytoraisecapitaltostarta new business. Nonetheless, besides raising money crowdfunding initiatives enables entrepreneurstogainfeedbackoftheproductbeforeitsreleaseintothepublicmarketplace (DeBuysereet.al.2012).Besidesgettingfeedback,entrepreneursareabletoestimatepricing information,demandfortheproduct,preciseinformationaboutmarketdemands,anddirect customer interaction (De Buysere et. al. 2012). Another possible benefit of crowdfunding from the entrepreneurs point of view is that crowdfunding can lead to wordaofamouth recommendationandothersocialmarketing(debuysereet.al.2012). Gerberet.al.(2012)foundthatentrepreneursdecidetousecrowdfundinginitiativestoraise+ funds,+ establish+ relationships,+ receive+ validation,+ replicate+ successful+ experience+ of+ others,+ and+ expand+ awareness+ of+ work+ through+ social+ media.+ Gerber et. al. (2012) also found that+ entrepreneurs emphasize that crowdfunding is an incredibly effective way of evaluating if theirproductorideahasa massappeal.otherscholarsfoundthatcrowdfundingestablishes a direct link between the entrepreneur and the customer. This link is the first step towards marketing, customer loyalty, participation, and emotional attachment to the product (De Buysereet.al.2012; Gerber et. al. 2012; Mollick 2013).+ Furthermore, being able to gain 34

36 informationaboutpreasales,numbersofbackers,amountofmoneyraisedinaspecifictime periodisvaluableinformationforentrepreneurs(belleflammeet.al.2012). 3.4)Relationship)Management)&)Marketing) The American Marketing Association s (AMA) definition of marketing indicates that: marketing+ is+ an+ organizational+ function+ and+ a+ set+ of+ processes+ for+ creating,+ communicating,+ and+ delivering+ value+ to+ customers+ and+ for+ managing+ customer+ relationships+in+ways+that+benefit+the+organization+and+its+stakeholders )Social)Customer)Relationship)Management) The social web has become a challenge for businesses in the area of customer relationship management(crm).theusersofsocialwebnotonlyshareprivateinformation,butalsouse ittosearchforproducts,ortosharerecommendationsandexperienceswithfriendsorother users(alt& Reinhold 2012).This represents a shift from the traditional, indirect customer contact though sales representatives, customer advisors,andcallcenteragentstowards a direct customer contact with consumers (Alt & Reinhold 2012). The social web enables companies to learn about opinions, experiences, and developments, which may be useful to develop and improve products. However, escalating discussions among users in the social web may have negative impact on a company s image. In contrast, a company may communicate and interact directly with consumers, either in campaigns or for service purposes(alt&reinhold2012). Itisclaimedthatmostcompaniesarecreatingaprofilepageonthesocialweb,butthatmost companiesdonotknowhowtosufficientlymakeuseofit(baird&parasnis2011).companies needtounderstandhowtomakeuseofsocialcrm,andrecognizethatinsteadofmanaging+ customers,theroleofthebusinessesaretofacilitatecollaborativeexperiencesanddialogues thatcustomersvalue.theabilitytounderstandwhatcustomers valueisacriticalfirststep towardbuildingasocialcrmstrategy. Baird and Parasnis(2011) found by surveying more than1000consumerand350executivesworldwidethatcustomersarefarmoreinterestedin obtaining tangible value. The research shows that consumers have strong opinions about theirsocialmediainteractionsand,despitetheirembraceofsocialmediatheirwillingnessto 13https://archive.ama.org/archive/AboutAMA/Documents/American%20Marketing%20Association%20Releases%20New%20Definition% 20for%20Marketing.pdf. 35

37 engagewithcompaniesshouldnotbeassumedortakenforgranted.furthermore,theyfound thatonlyaverysmallpercentageofconsumersengageregularlybyrespondingtopostsand authoring content. Moreover, more than 50 % of the consumers do not even consider engaging with businesses through social media sites. BairdandParasnis(2011) discovered significant gaps between what businesses think consumers care about and what consumers state they want from their social media interactions with companies. Consumers expect something tangible in exchange for their time, endorsement, and personal data. Lastly, they found that most business believe social media will increase advocacy. However, only 38 percentoftheconsumersagree,andmorethan60percentbelievepassionforabusinessor brand is a precondition for social media engagement. Therefore, companies need to find creativewaystotapthepowerofthetrustedsocialcommunity. AccordingtoAltandReinhold(2012)thesocialwebisanadditionalcommunicationchannel topotentialcustomers.byusing SocialCRM totapthepotential of interactive oneatoaone relationships with many customers, knowledge from the social web may enrich existing marketdatawithinsightsfromconsumers.itisalsosuggestedthatsocialcrmalsoenhance the reach and the effectiveness of customer interaction. Furthermore, social CRM activities may have the potential to increase customers identification with a company or a brand to improvetheinformationqualityofcampaigns,withstatementsorclassificationsfromother users. Moreover, it may make the interaction more interesting by employing appropriate locationabased loyalty and incentive mechanisms. Alt and Reinhold (2012) state that social web is turning into a competitive need for CRM, especially in sectors with endacustomer contact. 36

38 37 AltandReinhold(2012)stressthatsuccessfulsocialCRMisbasedonfivetasks: Task(areas( Description(&(Objectives( 1.SocialMedia SocialMediaservices,suchasforums,wikis,and communitiesforinformationdistributionand collaborativecreationofinformation Objective:Establishingofasocialmedia presence,networkingwith prospects/consumers/customers 2.Analysis Analyticaltechniquesformonitoringandmining, e.g.,evaluation,filtering,search,aggregation, enrichment,transformation,orruleabasedobject generation Objective:Identificationofrelevantcontents, actors,andservicesonthesocialweb, descriptionofdependenciesonthesocialweb andinterpretationofcontentsfromsocialmedia 3.Management Managementfunctionalities,suchasmoderation, processmanagement,reputationmanagement, dataintegration,evaluations,orprivacy management Objective:Strategicandoperational managementofsocialmediachannelsand activities,integrationbetweensystemsand ensuringtheresponsivenessofacompanyinthe socialweb 4.CRM LinktoCRMfunctions,suchaslead,contact, campaign,orservicemanagement Objective:FunctionalitiesforCRMprocess planning,executionandcontrol,useof informationfromsocialmediainformation(e.g., contactdata,postings)incrmactivities(e.g., analysis,campaigns) 5.Interaction Interactiontechniques,suchascontentdelivery, dialoguedevelopment,publication, dissemination,recommendation,alarm,or notification Objective:Externalcommunicationand supportofdialogueimplementationonthesocial web,proactiveandreactivecommunicationwith socialmediausers ( Figure(8(H(Tasks(and(Objectives(of(Social(CRM( Source:Alt&Reinhold(2012,p.290)

39 3.4.2)Interpersonal)Relationship)Marketing)Theory) According to Palmatier (2008) most theoretical an empirical research relies on models of interfirmrelationships,whichthenextendtointerpersonalorconsumerresearchtosuggest that the effects of relationship marketing on performance, depend on some combination of trust and commitment. Interpersonal relationship marketing is build upon social exchange theory.socialexchangetheoryproposesthathumanrelationshipsresultfromsubjectivecosta benefit analyses, which attempt to maximize benefits and minimize costs. Furthermore, exchangetheoryoftendrawsinreciprocitynormsasanunderlyingbuildingblock.however, relationship marketingamodels often ignore reciprocity, even though it represents a critical mediator of interpersonal relationship marketing (Palmatier 2008). Reciprocity sits at the core of marketing relationships (Bagozzi 1995, p.275). However, allowing a consumer to reciprocate a feeling of gratitude (reciprocity s emotional core ) converts a shortaterm emotionintoalongalastingrelationalnorm(palmatier2008). Relationshipmarketingundertakescircularreciprocation: ifidosomethingforyou,iexpect you to do something for me in return (Palmatier 2008, p.25). It is claimed that gratitude is inseparable from reciprocity because it reflects an embedded psychological pressure to returnthefavor; themererecognitionofbenefitseemstogenerateasenseofobligationto repay (Palmetier2008,p.25). Customergratitudeincreasesinresponsetofavors,andgratefulcustomersrewardfirmsfor extraefforts,whichimpliesthatinvestmentsinrmmakeconsumersfeelgrateful,whichthen promptsthemtoengageinbehaviorsthatimprovesellerperformance(palmatier2008) Palmatier(2008)statesthatthecognitivelyfocusedconstructsofcommitmentandtrustare interrelated with the emotional concepts of gratitude. In addition, cognition and emotion entwine closely (p.27).moreover,notonlydoesgratitudeenhanceshortaterm purchasing behaviors,italsopromotesconsumertrustandreciprocitynormswithitslongeratermeffects (Palmatier2008,p.27).Moreover,gratitudeenhancesrelationshipmarketingAperformancein threemainways:1.consumersengageinpositivepurchasebehaviorstosatisfytheirfeelings of obligation in response to relationship marketingainduced feelings of gratitude. 2. The increasedlevelsofconsumertrust,duetogratitude,increaseconsumercommitmentandthus enhancerelationalperformanceoutcomes.3.gratitudepromotesthedevelopmentofnorms 38

40 of reciprocity over the longer term and initiates a reciprocation cycle, which has longaterm positiveeffectsonconsumerbehaviors(palmatier2008,p.27). Palmatier s (2008) model of interpersonal relationship marketing shows how a seller s relationshipmarketingactivitiescanfosterlongatermrelationshipmarketingeffects. Figure(9(H(Model(Of(Interpersonal(Relationship(Marketing( Souce:Palmatier(2008,p.27) In a relationship, every individual has expectations. A relationship without expectations is meaningless.as relationships can never be one sided. An individual invests his time and energyinrelationshipsonlywhenheorshegetssomethingoutofit.therearerelationships whereanindividualreceiveslessthanhegives.thisleadstosituationswhere individual starts comparing his relationship with others. As the social exchange theory is based on a giveandtake approach it is a beneficial as a way to build relationship with customers. Furthermore, it could provide companies with knowledge about customer perceptions concerning the companies products. Crowdfunding is build upon the concepts of engaging with customers, why relationship marketing could potentially provide companies with valuable tool to successfully create campaigns and social media marketing activities, and at thesametimebuildlongatermrelationshipswiththeircustomers. ) 39

41 3.5)Social)Media) Nowadays,theInternetisthecheapestandmostefficientplatformforcompaniestoperform marketing content and interact with customers. One of the most effective ways to involve customersandcreatecommitmentandtrustisbyusingsocialmediaapplications. Socialmediaapplicationshaveemergedandhavebecomeapopulartoolamongcompanies. According to Kaplan and Haenlein (2010) social media is a group of Internet based applications, which build upon the ideological and technological foundations of Web 2.0. It allows individuals to create, share, and exchange information and ideas in virtual communities to coacreate, discuss, and modify useragenerated content (Evans 2010). The everadeveloping Internet, which is now also available on smartphones and tablets are the main reason for increased participation in social media. It is said that it is an interactive media, which exploits the interplayofusers,whereineveryuserhasaninput(eyrich et. al. 2008). Social media has now become one of the most popular techniques for marketers to approachconsumersandcreateawareness. A forecast suggests that by 2015 approximately 1/3 of the global population will be interconnectedthroughdifferenttypesofsocialmedia.thispenetrationofsocialmediawill result in consumer expenditures of $29 trillion dollars (Evans 2010). Social media has therefore been called a major disrupter of marketing management over the past decade (Evans2010). One of the explanations why social media has become popular today is that we live in a communicativeenvironmentthatisexperiencingalackoftrust.asaresultofit,peopledonot trust advertising and other sources of official information about products and are wary of any information, which does not come from people they know personally (Brogan & Smith 2010).Thiscausedpeopletouniteincommunitiesthatsharecommoninterests. AccordingtoEvans(2010)socialmediahasavalueforallfunctionsofbusiness.Connecting business with consumers via social media is defined through the concept of social business. Socialbusinessextendssocialtechnologythroughoutthebusiness,includingproductdesign, customerservice,andpromotionteams.furthermore,socialmediacanbeusedforideation, early warning of problems or opportunities awareness aids, market expansion, customer service,competitivethreats,andexposedweaknesses(evans2010). 40

42 AccordingtoEvans(2010)thekeytosocialbusinessisconsumerengagement.WhileSocial media allows the achievement of collaboration between business and consumer, traditional advertisinggoalsareexposureandimpression. Evans (2010) suggest four fundamental way of consumer engagement in social business: consumption,curation,creation,andcollaboration.seefigure10forfurtherexplanation. Figure(10( (4C s(of(consumer(engagement(in(social(business( Source:OwncreationbasedonEvans(2010) Asfigure9shows,collaborationisthetoplevelofconsumerinvolvement.AccordingtoEvans (2010)therearesixtypesofcollaborationprojects: 1. Ideation is the development of ideas in different topics. Members of a community suggestideasandvoteonthem. 2. Support applications A are practices aimed at reduction of support cost through launching readya toause support forums and white label doaitayourself platforms poweredbysocialmediacommunity. 41 (

43 3. Knowledge exchange A is a platform for the exchange of knowledge between its members 4. GameAbased sharing A is a practice encouraging people to share information by involvingthemingamealikeactivities. 5. Crowdsourcing Aisapracticewhereanindividualorafirmrequestsacommunityto performcertainworkusuallywithoutinitialpayment. 6. Crowdfunding A is a practice in which a community pools money to finance certain activities Crowdfunding is the only form of consumeracollaboration, which requires monetary participation from consumers, and sometimes without any material reward. Evens (2010) emphasizesthatcrowdfundingcomparedtootherformsofconsumeraparticipationhasmore opportunities to affect the business than any other form of social media by determining products to be developed by companies. It is, hereby, suggested that social media collaborationhasgreateffectsoncrowdfundinginitiatives )Effects)Of)Social)Media)On)Crowdfunding)Initiatives) Studies have been made on how social media effects crowdfunding. Mollick (2012) establishedaconnectionbetweenfacebookfriendsandcrowdfundingprojects success.the research was conducted based on the sample from Kickstarter, more specifically in the film category,andwiththetargetofnotlessthan$5000usd.mollick(2012)foundthataproject creatorwith10friendshasa9percentprobabilityofsuccess,onewith100friendshasa20 percent probability of success, and one with 1000 friends has a 40 percent probability of success.however,theresearchdidnottakeintoaccount likes anddidnotincludeprojects wherethecreatorshavenofacebookaccount. Moisseyev (2013) attempted to provide a mathematical estimation of likes necessary to deliver certain crowdfunding goals. More specifically, Moisseyev(2013) wanted to estimate numberof likes necessaryfordeliveryofafundraisingtargetofanycrowdfundingproject. Moisseyev (2013) established a strong relationship between social media seals of approval andcrowdfundingactivities.moisseyevfoundthat likes arehardcurrencyincrowdfunding andclaims that likes affect all the fundraising results: the delivery of funding ratio, the fundraisingtotal,andthenumberofbackers.moreover,theestablishedconnectionbetween 42

44 fundraising total and likes indicated that, without sufficient likes the project target will probablynotbedelivered.basedontheestablishedconnectionbetween likes anddeliveryof crowdfunding target he found that a total of 546 likes can be sufficient to fundraise an intendedamount.however,moisseyev(2013)concludesthatthenumbergeneratedthrough thederivedequationcannotbetakenasasortofmagicnumberthatguaranteesresults. Moisseyev(2013)statesthatasmallnumberof likes maybringlittlechangetotheoverall result, but once a project collects a critical mass of likes, their effect is stunning. Lastly, he suggest that people with powerful social media profiles can get more likes for their crowdfundingprojectsandmore likes canbringmoremoney. 3.6)Customer)Engagement) Customer engagement is a topic of great interest to managers and consultants in diverse industriesandcompanies,andincreasinginterestincustomerengagementhasparalleledthe continued evolution of the Internet and the development of ever changing and innovative digitaltechnologiesandtoolsintheeraofweb2.0(sashi2012).powerfultoolsinthesocial media space like wikis, blogs, micro blogging sites like twitter, video and photo sites like YouTube and Instagram, and social networking sites like Facebook, and LinkedIn have becomeimportantfeaturesforcompaniesandcustomers: The+interactive+nature+of+social+media+with+its+ability+to+establish+conversations+ among+individuals+and+firms+in+communities+of+sellers+and+customers+and+involve+ customers+in+content+generation+and+value+creation+has+excited+practitioners+with+ its+potential+to+better+serve+customers+and+satisfy+their+needs +(Sashi2012,p.254)+ Therolesofthesellerandthecustomerconverge,withsellerandcustomercollaboratingin creating value (Prahalad & Ramaswamy 2004). Web 2.0 technologies and tools appear to facilitate the coacreation of value by seller and customer(harrison& Barthel 2009). Online community networks allow customers to become active coaconstructors of life experiences andconsumptionmeaning(firat&dholakia2006). 43

45 By using social media organizations can forge relationships with existing and new customers and form communities that interactively collaborate to identify and understand problems and needs (Sashi 2012). These+ interactions+ change+ the+ traditional+ roles+ of+ both+ seller+ and+ customer+ in+ exchange+relationships.+indeed+customers+often+add+value+by+generating+content+ and+ even+ become+ ardent+ advocates+ for+ the+ seller s+ products+ and+ can+ influence+ purchase+decisions+of+others+in+peer5to5peer+interactions.+(p.255) Engaged customers are claimed to be valuable assets for companies, as they are likely to recommendproductstoothers.engagedcustomerscanaddvalueforacompanybysharing content via wordaofamouth, blogs, social networking, and comments on web sites, etc. According to Sashi (2012) customer engagement expands the traditional role played by customers and includes them in the valueaadding process. This is done by helping sellers understand customer needs, participating in the product development process, providing feedback on strategies and products, and becoming advocates for the product/brand (Goodman2012) The engagement process mainly consists of providing customers with memorable experiences, which encourage the consumer to spread the word about a given company s productsorservices.essentially,itmightbuildspecialconnectionsbetweenthecompanyand its customers, thus, providing the customers with additional value to the products. The key path to establishing communication is by sharing content, which encourage customers to contactandinteractwiththecompany(goodman2012,pxv) )Customer)Engagement)Concept)And)Its)Significance) Theconceptcustomerengagementhasexistedasapartofthemarketeconomyfordecades. Essentially, in the consumer era the engagement concept has become more important than ever before, which is caused by several factors(chaffey 2007). Due to media fragmentation customer loyalty is significantly reduced compared to previous decades. This means that consumersnowadayshaveawideselectionofproductstochoosefrom;hence,evensatisfied customersmaynotnecessarilystayloyaltothebrand.moreover,highlydevelopedmediahas broadenedopportunitiesofdeliveringmarketingcontent;thusshiftedcustomerexpectations. 44

46 New media allow customer experiences to be increasingly more interactive; hence more meaningful to consumers. Furthermore, technological development, particular social media hasaffectedconsumerbehavior.forinstance,popularityoftraditionalmedia,suchasradio, television, printed press has dropped significantly in comparison to online media (Chaffey 2007). Solomon (2004) suggests that customer involvement with a given product consists of five maincomponents:firstly,personalinterest+inagivenproductcategorybringstheconsumer to the product in the first place. Secondly, a consumer considers possible negative impact caused by a wrong choice of a product, as the consumer perceive it. The other three main componentsaretheprobabilityofmakingabadpurchase,thepleasurevalueoftheproduct category,andthedegreeofhowcloselytheproductcategoryisrelatedtotheconsumer(pp. 127A131). The aim of crowdfunding is to develop a bond with the backers.maintaininganongoing relationshipandrepeatinginteractionswiththebackers,maydothis.researchshowsthatan ongoing relationship with consumers help them to feel more involved, thus, making the productorservicemoremeaningful.feelingsmorerelatedtoaproductencouragecustomers tostayloyaltothebrand(solomon2004) )Customer)Engagement)Marketing)Cycle) AccordingtoGoodman(2012)theCustomerEngagementMarketingCycle(CEMC)consistsof fourmainstages(seefigure11). 1. Providing an experience for the customers. Creating memorable experiences for the customer may involve different elements, e.g. providing an exceptional service or simply rememberingacustomer sname.agreatexperienceiswhatletsthecustomerdifferentiatea certaincompanyformnumerousothers(goodman2012). 2.Enticingthecustomertostayintouch.Establishingormaintaininginteractioniskeyto customerengagement.thismaybedonebyprovidingthecustomerwithcontactinformation, encouragetofollowthecompanyonsocialmediaetc.goodman(2012)statesthatitisvitally importanttoconsiderthewaysofenticingtheconsumertoconnectinthemeantimeor 45

47 immediatelyafterthebusinessinteractioniscompleted. 3. The actual engagement into communication. After delivering the service experience and encouraging them to connect with the company, the engagement phase begins. The consumers are invited to participate in the conversation with the company. Communication orinteractioncanbe,andmostfrequentlyis,setupinrelationtothecontentsharedbythe company(goodman2012). 4. As the result, consumers often get more enthusiastic about the product or brand, which leadstospreadingthewordaofamouth,whichistheultimategoalofthecustomerengagement process, as the customers share their service experiences with others, thus, attracting new potentialcustomers(goodman2012). Providingservice experience ) ) Customer endorsment Enticetostayin touch ) ) ) Engaginginto communication ) ) Figure(11( (Customer(Engagement(Marketing(Cycle( Source:OwncreationbasedonGoodman(2012) 3.6.3)Customer)Engagement)Online) Thekeyideaofcustomerengagementonlineistoutilizeonlinesocialmediatoolsinorderto carry out conversations with customers. One of the most important differences between traditional customer involvement and online customer involvement is that today s media allowcompaniestointeractwithcustomersinsteadofmerelytalkingtothem.therefore,by establishing a twoaway communication may allow companies to take a closer look at the customers needs and expectations (Goodman 2012, pp.4a5). The aim for companies is to 46

48 create brand advocates, and make them spreading information through wordaofamouth. WordAofAmouthisconsideredasoneofthemostefficientwaysofmarketingcommunication, as it is perceived to be more reliable and significant than content made by companies. Researchshowsthatconsumerstendtotrustexperiencesoftheirpeersmorethananytypeof advertisement.withtheuseofthesocialnetworks,wordofmouthisspreadthroughmultiple exchanges,givingthepotentialforthemessagetoinfluencenumerousreceivers.(brownet. al.2007). 3.7)Organizational)Legitimacy)&)Crowdfunding) Legitimacy+ is+ a+ generalized+ perception+ or+ assumption+ that+ the+ actions+ of+ an+ entity+ are+ desirable,+ proper,+ or+ appropriate+ within+ some+ socially+ constructed+ system+of+norms,+values,+beliefs,+and+definitions +(Suchman,1995,p.574) Crowdfunding may facilitate legitimacy development for nascent and promising ventures (Bocket.al.2014).Crowdfundingoffersentrepreneursa tailoramade solutiontocollectand allocate finance due to its marketafacing funding approach (Belleflamme et. al. 2013). Entrepreneursmightbeabletoestablishstrongnetworksinthemarketandutilizetraction fromthecrowdtoincreaseorganizationallegitimacyandfacilitatefinancialcapitalassembly (Bocket.al.2014). According to Suchman (1995) organizational legitimacy helps explain why some nascent entrepreneurial activities develop into successful firms and others do not. Mathews (1993, p.350)providesathoroughdefinitionoforganizationallegitimacy: Organizations+seek+to+establish+congruence+between+the+social+values+associated+ with+ or+ implied+ by+ their+ activities+ and+ the+ norms+ of+ acceptable+ behavior+ in+ the+ larger+social+system+in+which+they+are+a+part.+in+so+far+as+these+two+value+systems+ are+ congruent+ we+ can+ speak+ of+ organizational+ legitimacy.+ When+ an+ actual+ or+ potential+disparity+exists+between+the+two+value+systems+there+will+exist+a+threat+to+ organizational+legitimacy + Organizational legitimacy may be understood as a resource, additionally, as a signal for resource assembly in entrepreneurial processes and activities (Ahlstrom & Bruton 2002). 47

49 Establishing legitimacy can facilitate quicker and efficient capital acquisitions, as well as legitimacy and resource assembly are likely coacreated during organizational development (Zimmerman&Zeitz2002).Itissuggestedthatlegitimacygivesventuresaccesstoexternal stakeholdersandisassociatedwithinflowofexogenousresources (Mason&Harrison2000; Chenetal.2009). Anderson (2005) emphasizes that various ventures may seek legitimization by communicating projections of the firm s intended operational or commercial pathway. In regardstocrowdfundinginitiativesthismaysupportlegitimization.however,mollick(2014) suggests that legitimacy is not easily obtained during crowdfunding, and found that unsuccessful projects fail their funding target by large amounts while successful projects exceed their targets by small amounts. This indicates that project legitimacy is relatively difficulttoachievewhencreatingacrowdfundingcampaign )Creating)Crowdfunding)Legitimacy) (( Cultural entrepreneurship theory emphasizes that the subjective perception of the firm to externalagents,regardlessoftheobjectivevalueofthefirm sresourcestock,maybeessential tolegitimizationandultimateresourceassembly(lounsbury&glynn2001). ZimmermanandZeitz(2002)statethatthiscontrastswithboundedrationalityapproachesto venturecapitalinvestment;hencetheseapproachesrelyonmodelsofriskminimizationand management.lounsburyandglynn(2001)suggestthatusingnarrativeandstorytellingcan provide+ needed+ accounts+ that+ explain,+ rationalize,+ and+ promote+ new+ venture+ to+ reduce+ uncertainty+typically+associated+with+entrepreneurship +(p.546).itissuggestedthatstoriescan provide a link of shared sense making between the entrepreneurs and the stakeholders (Martenset.al.2007). Within crowdfunding initiatives these stories are communicated via videopitchesandwrittentextmadebytheentrepreneur.mollick(2014)foundthatpotential investors, i.e. backers, are attracted to projects that appear likely to succeed. Bock et. al. (2014)statethat: Crowdfunding+ leverages+ interactive+ ICT+ features+ to+ create+ a+ dynamic+ environment+that+could+nurture+and+build+organizational+legitimacy (p.7) 48

50 This means that by using crowdfunding mechanisms, entrepreneurs are able to create narratives,whichcommunicatesinformationtoitsinvestors.accordingtoreuberandfischer (2005) active engagement facilitates ventures establishing organizational legitimacy with their customers, leveraging cultural dynamics inside online communities to support capital assembly. 3.8)Perceived)Value) The term perceived+ value is considered as the comparison between the total perceived benefitsandthetotalperceivedcosts(lovelock2001).chenanddubinsky(2003)statethat perceived value is the sum of transactional costs and expected profits or losses. Another findingsuggeststhatperceivedvalueisthedifferencebetweenacquiredprofitsandpaidcosts when a consumer tends to maintain the continuous relationship with the service provider (Sirdeshmukhetal.2002).Additionally,SweeneyandSoutar(2001)proposethedimensions fortheproductbasis,including:1.emotionalvalue:aconsumer sperceptionoftheproductor serviceintheconsumptionprocess.2.socialvalue:aconsumer scognitionoftheproductor serviceinthesocialimage.3.qualityfunctionvalue:themeasurementoftheproductquality and the acquired performance it delivers. This shows that if planning a crowdfunding campaigntheyproductsofferedhavetopresentedaseitherbeinganeedtohave,aproductor service, which serves a greater value in social communities, or delivers a higher value than alreadyexistingproductsorservices. Perceived(Customer(Value( Perceived customer value is identified as marketing and branding related concepts, which points out that success of a product is largely based on whether customers believe it can satisfy their needs. This phrase emphasizes that when a company develops its brand and markets its products, customers ultimately determine how to interpret and react to the marketing messages. The term value proposition is used to better understand customer perceived value. A value proposition is a comparison of the benefits offered by a company's product to its customers relative to the price it asks customers to pay. Companies can generally influence the value proposition in one of two ways. Companies can use long-term brand building advertising to emphasize key traits of the brand and products, or they can offer a relatively low cost to enhance value. Ultimately, the key is that customers feel that 49

51 the product's value exceedingly justify its price (Osterwalder & Pigneur 2010). 3.9)Marketing)Value)Of)Crowdfunding) Crowdfundingcampaign spotentialfinancialbenefitsaresignificant.however,itissuggested thatitalsobringsbenefitsseenfromamarketingperspective(belleflammeet.al.2013). As mentioned in the introduction three marketing functions are important regarding crowdfundinginitiatives:research,promotion,andengagement.theresearchsuggeststhat crowdfunding is a useable market research tool; hence crowdfunding campaign allows receivingfeedbackonagivenproduct,andtheabilitytoestimatethepotentialcustomerbase. In addition, some crowdfunding campaigns offer their supporters an opportunity to participateinproductdesign.itisacknowledgethatconsumers inputoftenallowsadopting the product to be more attractive for the potential market. Gruner and Homburg (2000) suggest that interacting with customers has proven to have positive influence on the product s future success rate. Belleflamme et. al. (2013) propose that crowdfunding campaigns can be used to promote a product by encouraging consumers to spread information about the campaign through wordaofamouth. The research on the topic claims that some companies used their crowdfunding campaigns purely for marketing purposes, hence it was considered as the easiest, and moreover, the cheapest way of advertisement. Several of the interviewed companies state that their crowdfunding campaigns helped to draw attention of press and media. Additionally, the interviewees state that the funding contributors tend to become active promoters of the products themselves, as the feeling of involvementinthefundedprojectmotivatesthemtospreadthewordaroundthepeoplethey know.therefore,crowdfundingappearstobeanefficientwayofbuildingupaconsumerbase (Gorshkov2011),becausecrowdfundingcampaignoffersanincreasedsocialmediaexposure. The obtainable exposure can lead to further spreading of the word by users or media. It is suggestedthatcustomersaremorewillingtospreadtheinformationabouttheprojectsthey support though social networks, allowing the crowdfunding creator to establish their own online community based on those people(gerber et. al. 2012). Lastly, engagement with the customers is achieved through rewarding them with certain perks for their donations. The rewards can be both tangible and intangible (Gerber et. al. 2012). Additionally, customer engagementisnotsimplyassociatedwithrewards,butestablishingtwoawaycommunication 50

52 betweenthebackersandthecreators,engagingthecustomersintoacommunity,urgingthem tofeelapartofthegroup(gerberet.al.2012). 3.10)Online)Social)Communities) ThekeyfactorinanycrowdfundingcampaignistheuseoftheInternet,andparticularlysocial media.crowdfundingplatformsdependonanonlinesocialcommunity.onlinecommunities aredefinedasanyvirtualspacewherepeopleinteracttoconverse,exchangeinformationor resources,learn,orplay(krautet.al.2012).scholarsinvestigatingsocialscienceproposehow to get a online social community started, integrate newcomers, encourage commitment, regulate behavior when there are conflicts, motivate contributions, and coordinate those contributions to maximize benefits for the community (Gerber et. al. 2012). Weng and Fesenmaier (2003) examined why community members are willing to make active contributions to their community and found that motivations of efficacy, instrumental, and expectancy have positive effects on level of contribution. Firstly, using Facebook to expand one's social network is a type of instrumental motivation. Specific instrumental motivations include seeking/providing emotional support, finding friends/peers, relationship building, group attachment/commitment, expressing identity, and increasing selfaesteem/respect. Second,efficacyasamotivationisprovidinghealthadviceonanonlinehealthforum.Efficacy motivations include satisfying other members' needs, being helpful to others, seeking/providing advice, and sharing enjoyment. Third, quality assurance motivation includeseditingwikipediatomakesureinformationiscorrectanduptodate.basicquality assurance motivations are controlling products, service quality, and enforcing suggestions/evaluations. Fourth, status motivations include gaining prestige and attaining statusinthecommunity.lastly,expectancyasamotivationincludeswaitingforareplyona Twitter feed. The main expectancy motivations are seeking future exchange from anybody and seeking future exchange from someone who provides help. Moreover, ease of communication, members' personality, and their level of general involvement in the communityhadpositiverelationshipswithlevelofactivecontribution.moreover,individuals contributing to online communities are also driven by motivations, such as the desire for knowledge,socialstanding,peercompanionship,approval,desiretoimprovesociety,andto beautonomous(gerberet.al.2012). 51

53 3.11)Consumer)Engagement)In)An)Online)Community) Hui et. al. (2014) investigated how creators of a crowdfunding campaign use their social network to reach their campaign goals. They identified tree main challenges, which included understanding network capabilities, activating network connections, and expanding network reach. Hui et. al. (2014) state that many creators and supporters have the desire to mitigate annoying others or getting annoyed by excessive request for help. Moreover, some of the creators also described the difficulties of knowing how to address the crowd and ask for their support. Furthermore, they suggest that creators often do not realize the need to grow a network of supports prior to a campaign. This indicates the need to understand the marketing strategy implication connected to crowdfunding. Hence, creators are often not experienced in business operations but often merely creative people having a good idea. Hui et. al. (2014) notice in their study that successful project creators may more often build an online audience prior to campaign launch, and write targeted rather than general messages asking for support. Also, they found that connecting with people outside their personal network, and locate people with interests aligned with the project is important before launching a campaign )Understanding)The)Role)Of)Community)In)Crowdfunding)Work) Hui et. al. (2014) aim is to understand the collaborative efforts and dayatoaday activities of crowdfunding users to design and improve crowdfunding support tools(hui et. al. 2014, p. 62). Hui et. al. (2014) interviewed 47 crowdfunding campaign creators, and found that the creators carry out five main types of work: preparing+ the campaign material, testing+ the material, publicizing+ the project, following+ through+ with project goals, and reciprocating+ resources to the community. They also found that during each stage of work there was collaborationamongallindividualsinvolvedi.e.othercreators,employeesworkingwiththe crowdfundingplatform,andbackers. Hui et. al. (2014) put together a table( of crowdfunding work, including definitions and summaryoftheroleofcommunitythroughouttheworkprocess.(seefigure12) 52

54 Figure(12(H(Crowdfunding(work(and(role(of(community(throughout(the(work(process.( Source:Source:Huiet.al.(2014,p.5) Huiet.al.(2014)highlightthatcrowdfundingcreatorsshouldmaintainregularcontactwith their community throughout the campaign, by providing content to the backers on a daily base.furthermore,theirfindingsindicatethatmaintainingtherelationshipwiththebackers, introduces unique difficulties to the typical entrepreneurial process. Creators are seeking lasting relationships, thus following communityabuilding practices. Creators are striving to engage with supporters personally by explaining the value of their support, recruiting supporters to spread the word about the campaign in order to reach the critical mass of members.moreover,creatorsareextrinsicallymotivatingpeopletocontributebypromising rewards(huiet.al.2014,p.70).additionally,huiandcolleaguesfoundthatcreatorsheavily reliance on community is beneficial because consumers throughout the campaign are constantlyjudgingtheirwork.however,eventhoughcreatorsacknowledgetheusefulnessof receivingfeedbackfromthecrowd,onlyfewcreatorsattempttodoitonalargescalebecause ofthefearofpublicrejection.lastly,crowdfundinginitiativesrelyoncollaborationtoachieve project goals. Crowdfunding fundamentally relies more on community supportforproject success. Hui et. al. (2014) found that creators rely on community efforts to overcome difficulties of getting advice, designing one s campaign, getting feedback, publicity, and shippingrewards. 3.12)Discussion)&)Reflections) Astheliteratureoncrowdfundingisnascentandstillinitsinfantstagesitishighlyrelevantto takethemanyliteraturestreamsunderthemagnifyingglass.whensearchingtheinternetto 53

55 gainknowledge about crowdfunding, Ifoundvariouswaystoinvestigatethe crowdfunding space.( So far, the literature review chapter presented has delivered a structure and discussion of crowdfundinginitiativesinconnectiontoentrepreneurialsuccess.furthermore,theliterature review has presented a concise set of definitions of key concepts. Overall, the literature review evaluates how to use crowdfunding initiatives i.e. what kind of value can crowdfunding initiatives generate, what are the benefits of crowdfunding from a marketing perspective,andwhichconditionsneedtobeinplaceinordertomakeuseofcrowdfunding initiatives. The crowdfunding platforms have received much attention as an alternative way for entrepreneurs to raise capital, how to set up a campaign, which factors are important to create a successful campaign, and what benefits exist for startaups. However, there is still a lackofacademicstudiesregardinghowtomakeuseofmarketinginitiatives,whythisstudy willemphasizehowestablishedcompaniescanusecrowdfundinginitiativesaspartoftheir marketingstrategy. Literature on established companies using crowdfunding has not received much academic attention, if any, yet. This means that the research on this particular topic is made by best guesses, which is connected to research already investigated in the fields of crowdfunding, social CRM, and customer engagement. Moreover, the research is aligned with the growing interestofhowcrowdfundingcanbeusedformarketingpurposes,whichisthemainfocusin theliteraturereview. The aim is to connect the presented literature with the collected data to investigate how established companies might utilize crowdfunding initiatives to support their social media activities. 54

56 4.)Findings) Thefollowingchapterwilldisplaythefindings.Thechapterstartswithabriefintroductionof the company in question, Mikkeller ApS, in order to present background information about their business activities, industry and market position. Afterwards, the main findings of the interviewsfromalltheintervieweesarepresented.lastlyadiscussionismadetoconnectthe findingsandresearchquestion. 4.1)Case)Study) 4.1.1)Mikkeller)ApS) MikkellerisaDanishbrewingcompanyfoundedin2006inCopenhagenbytwofriendsMikkel Bjerg Borgsø and Kristian Keller 14. In 2007 Kristian Keller left Mikkeller to pursue other career dreams. However, Mikkel continued to brew and develop innovative beers. Today Mikkeller export beers to 40 countries around the world. Mikkeller has made collaboration beers with some of the world s most acknowledged and innovative microbreweries; Three Floyds,Chicago,deStruise,Belgium,HillFarmstead,VermountandAnchorage,Alaskajustto name a few. Mikkeller also makes house beer for some of the best and most prominent gourmetrestaurantsindenmark,suchasnoma(michelin),mielcke&hurtigkarlandkiinkiin (Michelin).BecauseofMikkelʼsinventiveandconstantdevelopmentofMikkellerhehasbeen calledtheʻcultʼ,ʻrockʼnʼrollʼandʻgypsyʼabrewerindanishandinternationalpress 15. Beer)Geek)Breakthrough) The big breakthrough in the international beer world arose with a clean and simple idea of adding French press coffee to an oatmealastout. The result ʻBeer Geek Breakfast was voted numberonestoutontheinternationalbeerforumratebeer.comandkickastartedmikkeller s international success. That same year two American distributers travelled all the way to Denmark, which resulted in Mikkeller signing a distribution deal with the American beer distributor,sheltonbrothers.shortlyafter,mikkellerstartedbrewingbeergeekbreakfastat thedanishmicrobrewerygourmetbryggeriettocopewiththedemand http://press.mikkeller.dk/wpAcontent/uploads/MikkellerABio.pdf http://press.mikkeller.dk/wp-content/uploads/Mikkeller s-vision.pdf 55

57 The)Vision) The vision is to brew beers that challenge the concept of good beer and move people. Mikkellerdothisbyusingthebestingredientsandworkwiththemosttalentedandcreative minds around the world. Furthermore, Mikkeller aims to make quality beers a serious alternativetowineandchampagnewhenhavinggourmetfood 17. Mikkeller)And)The)Craft)Beer)Market) Mikkeller is considered as one of the best microbreweries in the world, topping the lists on severalratingwebsitessincethe2006.however,themicrobrewingmarketspaceisdifficult to put in boxes due to the fact that almost all of the breweries are independently owned. Furthermore,microbreweriesbrewmanydifferentstylesofbeer,quantitiesofbeerbrewed, and collaborations between companies, which make it difficult to make segmentations. However, when viewing the two major rating sites on the Internet RateBeer and BeerAdvocate, Mikkeller is popping up on all the various lists as one of the best and most innovative breweries in the world. Furthermore, it is relatively easy to enter the micro brewingmarketduetothelowentrycostse.g.onedoesnotneedtoownabrewerytostarta brewing company. New breweries are entering the market almost on a daily basis, and Brewersassociation.orgmorethat2800breweriesexisttoday 18. Entrepreneurial)Explosions) Mikkeller is not merely a brewery. Mikkel Bjerg Borgsø always strives to pursue new ventures,whichhealwaysbelieveswillsucceed.in2010mikkelopenedhisfirstbeerbarat Vesterbro, Copenhagen. The bar has been on the list of best beer bars in the world ever since 19. However, the entrepreneurial drive did not end there. The timealine illustrates the expansionofthemikkellerbrand(appendixv). IinterviewedonekeyemployeeatMikkellerinordertogaininsightandknowledgeonhow Mikkeller views their opportunities, challenges, and difficulties regarding their marketing work and options to facilitate crowdfunding, and how they believe crowdfunding initiatives 17http://press.mikkeller.dk/wp-content/uploads/Mikkeller s-vision.pdf 18http:// 19http:// 56

58 can support their business. As mentioned in the methodology (chapter 3), the employee I interviewedwasjacobgramalsing,operationsmanageratmikkeller )Mikkeller) )Human)Communication)Through)Social)Media) ThefirsttopicofdiscussionwasaboutMikkeller smarketingstrategyandhowtheywantto be perceived by customers.the Operations Manager, Jacob Gram Alsing clearly stated that Mikkeller is a human company where everybody working at Mikkeller shares the responsibilityofpromotingthebrandtotheworld: + All+employees+help+with+the+promotion+by+posting+and+sharing+personal+information+on+ Facebook,+Twitter,+and+Instagram +(Alsing2014). Moreover,JacobGramAlsingisfocusedonmarketing,i.e.generatingcontentonsocialmedia, butemphasizedthatmikkellerisabrandthatisdynamicinitsmarketingactivities.moreover, since the company does not use any money on traditional marketing, e.g. posters, commercials,mikkellerrelyfreepublicityfromallitsstakeholders: We+ are+ not+ the+ normal + company+ where+ we+ have+ a+ full5time+ marketing+ manager+responsible+for+generating+information+to+our+customers,+and+we+ use+many+resources+but+we+do+not+use+any+money+on+marketing and we+ would+much+rather+in+direct+contact+with+our+customers,+and+we+do+this+by+ telling+ personal+ stories,+ not+ by+ putting+ up+ posters+ at+ Trianglen+ or+ some+ other+places +(Alsing2014). AlthoughMikkelleralmostdailyreceivesinquiriesfromcompaniesthatoffertomanagethe brewery'scommunicationprofessionallytheyalwaysgetrejectedbecauseitwouldnotcreate anyvalueformikkelleroritscustomers: I+believe+it+will+become+dishonest and+too+static.+we+want+to+be+the+rebel+ in+the+class+and+so+we+must+also+accept+that+there+may+be+typos+in+our+posts+ on+facebook +(Alsing2014). 57

59 Mikkeller s customers, fans, and even unhappy customers play an important role in the marketingstrategy,whetheritisbytellingthatachildisnamedafterthebreweryorthata customercriticizesthebeermikkellerattemptstouseitontheirsocialmediaplatform: We+want+to+involve+customers+in+both+extremes+5+from+the+extreme+fans+to+ the+ unhappy+ customers,+ we+ are+ just+ not+ aware+ of+ how+ we+ do+ it+ right + (Alsing2014). WhenaskingJacobGramAlsingwhetherMikkellerisacompanythatengageandinvolvetheir customers enough in the product development, Jacob Gram Alsing explained that they occasionallyasktheirfollowersonfacebooktocomeupwithideasregardingdevelopingnew products.furthermore,heexplainedthatmikkellertosomeextendusetheircustomersinthe brainstormingprocesswhenwantingtodevelopnewbeersbutthattheymightcouldbenefit evenmorefromcustomerinsight.healsoexplainedthatinvolvingcustomersmightbecomea challengeiftheywanttoberebellious: We+ know+ that+ it+ is+ all+ about+ selling+ beers+ to+ our+ customers+ and+ we+ are+ constantly+ developing+ new+ beers+ that+ challenge+ the+ market+ and+ our+ customers+( )+ we+ are+ aware+ of+ the+ saying+ the+ customer+ is+ always+ right + but+we+are+definitely+also+aware+of+our+competences+and+right+now+we+are+ selling+all+the+beer+we+produce +(Alsing2014). JacobGramAlsingexplainedthatMikkellerisnowawellestablishedcompanybuttheywill neverletthemselvesbecomeaconservativecompany,andthattheywillkeepdevelopingand pushingtheboundariesinthecraftbeerindustry.thismeansengagingwithcustomersina newwayandmakingthemambassadorsforthemikkellerbrand. Next topic was about legitimacy and how Mikkeller view their own legitimacy. Jacob Gram AlsingexplainedthathebelievesthatthereasonwhyMikkellerhasdevelopedintothekindof branditistodayismainlybecausemikkellerhassucceedintellingpersonalstories,andthat theircustomersappreciatepersonalstoriesratherthan fixed marketing.furthermore,jacob GramAlsingstated: 58

60 I+believe+that+people+buy+our+products+because+we+are+good+at+what+we+do,+ and+because+we+are+not+afraid+of+telling+people+about+it,+and+i+think+people+ love+that+we+are+ un5danish +and+that+we+behave+like+ rock+stars +(Alsing 2014). Jacob Gram Alsing further elaborated how the brand is still highly connected with the authenticstorythecompanyisbuildupon,andthathebelievesthatcustomersreallylikethe story,andinsomewayfeelconnectedtothebrand,duetothestory: The+ story+ of+ how+ the+ schoolteacher+ Mikkel+ (the+ owner+ of+ Mikkeller)+ transformed+ a+ simple+ hobby+ project+ into+ a+ worldwide+ success+ business+ is+ pretty+ simple+ a+ good+ story+ in+ itself.+ So+ when+ you+ have+ a+ story+ like+ this,+ awesome+ products,+ beer+ events,+ and+ dedicated+ employees,+ who+ care+ and+ believe+ in+ the+ brand+ and+ therefore+ produce+ stories+ without+ I+ have+ to+ tell+ them+to+do+so,+customers+can+feel+the+authenticity +(Alsing2014). However, Jacob Gram Alsing made it clear that Mikkeller could ultimately run the risk of becomingavictimofitsownsuccess: The+question+is+how+we+maintain+a+reputation+as+an+'underground'5brand+ while+the+company+grows+and+increasingly+turns+into+a+more+international+ brand.+that+is+something+we+will+always+have+in+mind (Alsing2014) )Mikkeller)&)Crowdfunding)Plans) Nexttopicwasfocusedoncrowdfunding,andmorespecificallyaboutMikkeller splanofusing crowdfundingtofundtheirnewestventure,abrewpublocatedinthemeatpackingdistrictin Copenhagen. When asking about how the idea of using crowdfunding originated from Jacob GramAlsinganswered: 59

61 we+ (Mikkel andjacob)+ want+ to+ bring+ ambassadors+ in+ to+ enhance+ the+ brand,+and+we+both+have+read+some+articles+on+crowdfunding+and+thought+ it+sounded+great+and+something+new+we+should+try (Alsing2014). Whenaskingabouttheimportanceofraisingmoneythroughthecampaign,JacobGramAlsing explained that it is about much more that just raising money, and that he believes that the campaignhopefullycanbuildacultureandcommunityaroundwhattheydo,andthatitcan lockinourbestcustomersandtakeadvantagesofthelinking,whichsocialmediaallowsthem to have with their customers. Moreover, when asking what kind of value he believes crowdfundingcanoffermikkeller,jacobgramalsingresponded: The+ primary+ value+ will+ be+ to+ create+ ambassadors+ who+ experience+ a+ co5 ownership+ in+ the+ project.+ Our+ brand+ is+ largely+ built+ on+ "word+ of+ mouth",+ therefore+is+the+creation+of+ambassadors+essential+for+spreading+the+word+ about+ us.+ Furthermore,+ not+ many+ Danish+ companies+ have+ plunged+ into+ major+campaigns,+and+therefore+we+imagine+that+there+will+be+some+media+ attention+on+the+project +(Alsing2014). Throughouttheinterview,JacobGramAlsingemphasizedthatwhateverMikkellerisdoingor willattempttodotheywillalwaysstrivetopushtheboundaries,beprovocative,notfollow othercompanies,challenge Janteloven (TheLawofJante),andwillalwaysstrivetobeahead oftheircompetitors,stating: We+strive+to+be+different,+and+we+always+try+to+do+things+differently.+It+has+ almost+become+our+mantra+to+do+unexpected+things+ +you+can+call+us+risk5 takers +(Alsing2014). When I asked Jacob Gram Alsing if he could see any risks regarding crowdfunding he elaboratedonstonebrewingco. srecentlyendedcampaign.jacobgramalsingexplainedthat whenhefirstheardaboutthecampaignhewassurprisedthatacompanylikestonebrewing wouldusecrowdfunding,andthathealsowasalittle pissed becausehefeltthatmikkeller suddenly could not follow Stone Brewing s footsteps. Furthermore, Jacob Gram Alsing 60

62 explained that when he heard about Stone Brewing rough start on IndieGoGo he felt a bit anxiousaboutusingcrowdfundinghimself,statingthat: + + I+ witnessed+ a+ company+ (Stone+ Brewing+ Co.),+ which+ was+ a+ the+ edge+ of+ loosing+ everything+ they+ have+ accomplished years+ of+ hard+ work+ was+ almost+ruined+by+a+crowdfunding+campaign.+by+witnessing+that+got+a+little+ afraid+and+stated+doubting+our+plans +(Alsing2014). When asking about how he sees Mikkeller s crowdfunding initiatives compared to Stone Brewing, Jacob Gram Alsing explained that Mikkeller s crowdfunding would be totally different. Instead of just preaselling new collaboration brews Mikkeller wants to create a community filled with ambassadors who buy memberships, and will be treated like coa owners: + we+ want+ to+ bring+ as+ many+ engaged+ people+ on+ board+ as+ possible,+ we+ will+ personally+get+to+know+everybody+involved,+and+we+will+interact+with+our+ members+personally +(Alsing2014).+ JacobGramAlsingelaboratedonthefactthatitseemedlikeStoneBrewingdidnotputenough work into their campaign, and that by viewing what they did and have done he could see a lack of engagement from the company s side. He explained that it seemed like Stone only focusedonthepurchasingpart,andnotonthecommunicationpart. ( ) + 61

63 4.2)Expert)Interviews) This section will present what the experts expressed about the relationship between crowdfunding and marketing purposes; crowdfunding and customer engagement; and crowdfunding and organizational legitimacy. Furthermore, I will also add secondary data in thispart )Crowdfunding)For)Marketing)Purposes) When asking the experts how they consider the opportunities of using crowdfunding for marketingpurposestheiropinionswereunanimous.theexpertfromindiegogojohnvaskis stated: Crowdfunding+ is+ a+ valuable+ tool+ for+ entrepreneurs+ to+ create+ awareness+ for+ their+ new+ venture+ or+ product.+ A+ crowdfunding+ campaign+ enables+ everybody+ with+ a+ good+ idea+ to+ share+information+directly+to+existing+and+potential+new+customers +(Vaskis2014). Inaddition,AssistantProfessor,JanWarhuusstatedthatcrowdfundingis: definitely+a+useable+ marketing+ tool+ for+ companies + (Warhuus 2014). He also suggests that crowdfunding is an extensionofalreadyrecognizedmarketingtheories: ( )+ We+ know+ from+ other+ theories+ like+ lead+ user,+ first+ user+ etc.+ that+ companies+ are+ interested+ in+ uncovering+ customers+ and+ communicating+ with+ their+ customers+ because+ they+(the+companies)+then+can+understand+how+to+make+better+products+or+services,+this+ is+ here+ crowdfunding+ comes+ into+ the+ picture+ as+ a+ quick+ and+ suitable+ tool + (Warhuus 2014). Moreover, fundraising expert Dennis Hørmann claimed that it is difficult even to separate crowdfundingandmarketingfromeachother: They+are+interrelated.+Crowdfunding+is+not+about+sowing+grass+just+by+looking+at+it.+One+ has+to+prepare+the+ground+numerous+times,+and+preferably+in+several+phases.+there+is+a+ lot+relationship+marketing+and+customer+relationships+management+going+on+the+whole+ project+through +(Hørmann2014). 62

64 WhensearchingInternetaboutcrowdfundingandmarketingIfoundseverallinksconcerned about how companies can utilize crowdfunding for marketing purposes. The CoAfounder of thecrowdfundingplatformindiegogo,danaeringelmannstatedthatnotallofthecompanies that create a crowdfunding campaign are in for the money, and that the uncovering of potentialnewcustomersandkeyinfluencersareinsomecasesevenmoreimportant: Not+ all+ the+ companies+ need+ the+ money;+ they re+ just+ as+ interested+ in+ how+ potential+ customers+ respond+ to+ their+ ideas.+ We+ are+ seeing+ venture5backed+ companies+ using+ IndieGoGo+as+a+way+to+connect+and+get+market+feedback+and+data +20.+Shefocusedonthe factthatcrowdfundingis: a+way+to+get+the+community+involved+and+get+them+excited,+so+ you+can+be+sure+you+are+making+something+people+really+want,+as+opposed+to+something+ you+hope+they+want AccordingtoRingelmann,crowdfundingshouldbeforeverybodyandthat everyone+deserves+ the+right+to+at+least+try+to+get+his+or+her+idea+off+the+ground 22.+Furthermore, she stated that individuals,entrepreneursorcompaniesareattractedtotheplatformsbytheopportunityto testideasandgainfeedbackfromlikemindedindividuals: It s+ an+ opportunity+ for+ the+ campaign+ owner+ to+ understand+ their+ market+ before+ they+ actually+launch.+in+that+way,+the+customer+will+get+a+better+product,+the+campaign+owner+ will+launch+a+better+product,+and+there+will+be+less+waste.+if+you+create+a+product+no+one+ wants,+it+will+just+go+to+the+landfill.+so+this+is+just+making+production+and+manufacturing+ smarter+and+more+efficient+and+sustainable 23. Moreover, Dr. Richard Swart, director of research on crowdfinance at UC Berkeley, has additionally suggested that crowdfunding initiatives: represents+ a+ cutting5edge+ integrated+ marketing+tool +andthatcompaniescanutilizecrowdfundingtobe: at+the+forefront+of+digital+ 20http:// 21http:// 22https:// 23http:// 63

65 strategies 24.Swartalsorecognizetheuseofcrowdfundinginitiativesasamarketingtooland statesthatitis: a+natural+evolution+of+how+companies+are+using+social+media+marketing Moreover,JanWarhuusstatedthatcompaniesthatdecidetomakeacrowdfundingcampaign alsohavetheabilitytouseitotherwaysandfocusesonthefactorsthatcrowdfundingshould be understood as a business model, where companies have the ability to attract more than justcustomers: Businesses,+even+if+they+use+a+lot+of+energy+and+money+making+the+campaigns,+it+will+be+ outweighed+by+the+publicity+they+get.+it+is+a+great+mistake+to+say+that+it+is+only+a+form+of+ marketing+5+i+think+that+if+you+look+at+a+business+model+canvas+there+are+not+any+of+the+ nine+boxes+that+can+not+be+affected+by+a+crowdfunding+project +(Warhuus2014) )Crowdfunding)Initiatives)Connected)To)Social)Media)Marketing) The next topic addresses the use of social CRM and relationship marketing. When asking whether these concepts can be used to increase the probability of making a successful crowdfundingcampaignandbuildrelationshipswithcustomerstherewereratherambiguous answersfromtheexperts. AccordingtoDennisHørmann(2014)heacknowledgethatmightbehugepotentialsofusing social CRM and relationship marketing to increase the probabilities of succeeding, and he believesthatalotoftheknowntheoriesandstrategies,whichareconcernedwithbuilding relationshipsandcommunicatingwithcustomersarevitalpartsincrowdfunding: I+think+it+goes+both+ways.+If+you+are+communicating+with+your+customers+on+your+social+ media+ platforms+ you+ will+ have+ a+ better+ chance+ of+ creating+ a+ successful+ crowdfunding+ campaign.+ On+ the+ other+ hand,+ if+ communicating+ and+ involving+ backers+ throughout+ the+ whole+ campaign+ they+ will+ automatically+ turn+ to+ your+ social+ media+ pages+ during+ the+ campaign+to+learn+more+about+your+products (Hørmann2014) 24http:// 25http:// crowdfun 64

66 However, Jan Warhuus explained that it is possible that social CRM and Relationship marketing can be used to support both a company s crowdfunding campaign and increase awarenessofthecompany ssocialmediapresence.however,janwarhuusalsoexplainedthat researchersneedmoredatatobeabletoanswerthatquestionortodrawconclusionwhether it works and essentially how it works. He also emphasized that researchers are trying everythingtoexplainthereasonswhysomeprojectssucceedandwhysomeprojectsarenot: I+think+there+is+a+somewhat+greater+and+more+direct+involvement+of+a+backer+than+by+a+ Facebook+ follower.+ It+ (crowdfunding)+ is+ based+ on+ behavior,+ not+ intentions+ and+ people+ must+ have+ money+ out+ of+ your+ pocket+ without+ getting+ anything+ for+ them+ right+ here+ and+ now.+in+this+way,+a+crowdfunding+campaign+is+a+type+of+sorting+mechanism+that+provides+ access+ to+ a+ dedicated+ group,+ definitely+ not+ the+ only+ one,+ of+ customers.+ There+ are+ tremendous+ opportunities+ to+ exploit+ the+ access,+ we+ just+ need+ to+ know+ more+ about+ the+ backers+first (Warhuus2014). ( John Vaskis also contributed with insights regarding the question stating that the more content written about your company from other sources the more likely it is that you will succeedwithyoursocialmediamarketingandalsoyourcrowdfundinginitiatives: As+I+see+it,+the+first+step+in+sustainable+marketing+is+your+community.+Identify+the+most+ influential+ members+ and+ develop+ a+ relationship+ with+ them.+ In+ doing+ so,+ you ll+ maximize+ your+ reach+ without+ any+ additional+ effort.+ You+ could+ also+ compile+ a+ list+ of+ popular+ bloggers+in+your+industry+and+contact+them+directly.+if+you+can+have+other+people+writing+ about+your+project+in+an+objective5outsider+style,+your+company+becomes+more+credible + (Vaskis2014). John Vaskis also explained that companies should make their social media more linkable implying that crowdfunding activities should not only be on the crowdfunding platform but that companies should be extremely aware of using every chance they have to share their projectonseveralsocialmediaplatforms: By+ publishing+ multimedia+ press+ releases+ incorporate+ a+ variety+ of+ different+ elements+ to+ 65

67 captivate+your+customers.+it s+about+informing+your+customers+about+any+big+changes+or+ upcoming+events.+by+being+true+to+your+customers+you ll+establish+a+long5lasting+identity+ with+ your+ followers,+ and+ if+ you+ involve+ your+ readers+ every+ step+ of+ the+ way,+ they ll+ never+ feel+overwhelmed+by+your+frequent+updates.+map+out+a+strategy+and+stick+to+it,+but+try+to+ not+ be+ overly+ aggressive+ in+ your+ approach.+ Consistency+ and+ quality+ are+ the+ most+ important+when+it+comes+to+building+genuine+relationships+online.(vaskis2014) 4.2.3)Crowdfunding)As)A)Customer)Engagement)Channel) JohnVaskiscontributedtothisstatementclaimingthatcrowdfundingbesidesbeingatoolto assemble financial support new business opportunities also has the ability to create communitiesmonthsbeforeactuallylaunchingthebusiness:++ + If+it s+applied+correctly,+crowdfunding+enables+individuals+to+create+strong+communities,+ which+ contains+ key+ individuals+ who+ can+ associate+ themselves+ to+ the+ product.+ Furthermore he stated: these+ individuals+ play+ a+ vital+ role+ throughout+ the+ campaign+ causing+them+to+go+viral,+because+they+ share +their+pledges+and/or+donations+with+their+ networks +(Vaskis2014) JanWarhuusalsocontributedtothisquestionbysayingthatestablishedcompaniesthatwant to use crowdfunding have the ability to benefit from it in many ways. He explains how crowdfundingcreatestheopportunitytogetevenmoreenthusiasticpeopletoback,shareand talkaboutacertainproduct: Companies+ that+ already+ have+ a+ fan+ base+ with+ 'real'+ fans+ can+ use+ crowdfunding+ to+ get+ more+'real'+fans.+your+customers+who+ just +like+you+suddenly+have+the+chance+to+be+ part + of+ your+ company+ by+ seeing+ their+ contributes+ as+ an+ I+ helped+ you + support (Warhuus 2014).+ + AccordingtoDr.RichardSwartcrowdfundingcampaigns: can+strengthen+customer+affinity+to+ brands + and that campaigns represents+ a+ unique+ marketing+ opportunity+ for+ forwarding5 66

68 thinking+companies+to+dramatically+strengthen+consumer+ties+with+their+brand 26 + Moreover,DianaRingelmannclaimsthatthereis: an+element+of+community+engagement+and+ market+feedback+and+giving+fans+the+opportunity+to+be+involved +27.+Meaningthatcrowdfunding cancreaterippleeffects,whichleadstowordaofamouthadvantages. Furthermore, John Vaskis sees a huge potential of crowdfunding as a customer engagement channel,expressingthat: Crowdfunding+gives+companies+shortcuts+to+building+at+least+two+of+the+three+elements+of+ brand+equity+viz.+brand+awareness+and+brand+loyalty,+and+it+doesn t+necessarily+detract+ from+the+third,+brand+association +(Vaskis2014).++ + Butmorethanjustbrandawareness,crowdfundinghastheabilitytobreedbrandloyalty.By statingthatcrowdfundingcanproduceafeelingof: I+helped+make+this+happen +(Vaskis2014). DennisHørmannsuggestedthatthepeoplewhoarebackingaprojectareextremelyvaluable people,andthatcompaniesshouldusethemformorethanjustmonetarypurposes.infact,he seesagreatpotentialifusingthebackerscorrectly: A+ lot+ of+ them+ (the+ backers)+ who+ are+ on+ the+ crowdfunding+ platform+ are+ properly+ also+ writing+ reviews+ or+ operates+ on+ other+ platforms.+ Can+ you+ get+ those+ people+ further+ activated+in+relation+to+the+product+so+that+they+can+create+interest+and+demand+at+other+ levels.+ ( )+ it+ is+ hard+ to+ come+ up+ with+ a+ specific+ solution,+ but+ maybe+ you+ could+ reward+ them+ according+ to+ the+ hype+ they+ create+ around+ the+ product+ instead+ of+ matching+ the+ reward+according+to+the+amount+of+money+they+give +(Hørmann2014) + JohnVaskisintroducedanewerapproachofthetraditionalmarketingmix.Heindicatesthat crowdfundinginitiativesarebuildonthe4p soreventhe7p s,butthatcompaniesthatwant 26http:// 27http:// 67

69 to utilize crowdfunding need to acknowledge a newer approach to effectively use crowdfundingcampaignsasacustomerengagementtool.heintroducedconceptthe3e s: The+3 s:+engage,+equip,+and+empower.++engage+ +Give+your+fans+the+gift+of+you.+Engage+ with+ them.+ Listen+ to+ what+ they+ are+ telling+ you.+ You+ have+ to+ be+ part+ of+ the+ conversation+ about+ your+ brand,+ and+ be+ a+ presence+ in+ your+ fans + lives.+ Equip+ + give+ them+ a+ reason+ to+ talk.+it+can+be+telling+about+be+amazing+products,+great+service,+insider+knowledge,+social+ elevation,+ incredible+ stories,+ unbelievable+ facts+ or+ even+ funny+ disclosures.+ It s+ on+ you.+ It+ really+depends+on+you+understanding+your+consumers+and+what+they+like+about+you+and+ providing+whatever+it+is+they+need+from+you.+empower+ +give+consumers+different+ways+to+ talk+ and+ share.+ Let+ them+ know+ that+ they+ are+ important+ to+ you+ and+ that+ sharing+ their+ opinions+ is+ important+ to+ you.+ Help+ them+ find+ ways+ to+ share+ with+ their+ circles+ and+ find+ ways+to+help+them+move+their+conversations+around. +(Vaskis2014) 4.2.4)Crowdfunding)To)Foster)Brand)Advocates) When asking about the potentials of using crowdfunding initiatives to nurture brand advocatesitbecameclearthatitisimportantforcrowdfundingcreatorsthattheyknowhow to use social media, and that creators have to have in mind that successful crowdfunding is notonlyaboutprovidinginformationbutalsoaboutlisteningtothecrowd: Social+ media+ is+ a+ powerful+ tool,+ but+ rarely+ properly+ used+ by+ entrepreneurs+ to+ build,+ excite,+and+engage+their+crowds.+i+would+say+the+problem+is+not+the+technology+available,+ but+rather+the+internal+culture+of+the+organization +(Vaskis2014).+ In addition, Jan Warhuus explained that the culture of communication, transparency, and collaboration are vital parts of crowdfunding, and if not used properly tremendous opportunitytobuildpowerfulonlinecommunitiesthroughsocialmediaengagementwillbe missed.janwarhuusalsoputgreatemphasisonthevaluethatbackerscangiveacompany: The+value+the+backers+can+offer+a+company+can+not+be+overstated+in+crowdfunding.+When+ the+ backers+ tell+ friends+ about+ a+ product+ or+ service+ they+ have+ backed+ these+ friends+ are+ much+more+likely+to+check+the+product+or+service+themselves+and+then+tell+their+networks+ 68

70 + about+it +(Warhuus2014). Furthermore, Jan Warhuus explained the importance of the backers after the campaign has endedisevengreaterthanthemoneythebackershaveputintoacompany scampaign: + After+ the+ crowdfunding+ campaign+ the+ crowd+ is+ still+ the+ most+ vital+ asset+ you+ received+ from+ a+ successful+ campaign.+ The+ crowd+ has+ now+ converted+ into+ your+ marketing+ and+ promotion+ team+ by+ becoming+ brand+ advocates+ that+ increase+ your+ brand+ awareness+ through+ social+ media+ e.g.+ word5of5mouth.+ They+ will+ become+ an+ important+ part+ of+ your+ product/service+ development+ team+ that+ can+ provide+ market+ validation+ and+ proof+ of+ concept +(Warhuus2014). John Vaskis also elaborated on this by stating that companies that use crowdfunding have hugeamountsofdataaboutspecificelementsofacompany sideasorproduct.companiescan extractthedataandevenuncovertrulyenthusiasticpeople,whichcanbebroughtinbefore launchingthefinalproducttothemarket: Backers+will+also+play+an+important+part+after+your+campaign+because+you+now+have+the+ market+research,+data,+and+a+market+for+your+product +(Vaskis2014)++ Moreover,JohnVaskisalsospecifiedthatthemostcommonmistakemadebyentrepreneurs facilitatingcrowdfundinginitiativesistheimportanceofbuildingthecrowdbeforeentering thecrowdfundingplatformbecausethetaskisonlyjuststatedwhenyougetfunded: + The+ funding+ part+ is+ not+ the+ most+ important.+ You+ have+ to+ prepare+ the+ campaign+ beforehand+ so+ that+ the+ backers+ will+ not+ only+ fund+ your+ project+ but+ most+ importantly+ become+engaged+community+members+during+the+campaign +(Vaskis2014). Bydoingso,thecompanies could create hubs of dedicated customers and give them the feelingthattheyarepartoftheproject. 69

71 4.2.5)Crowdfunding)Risks)For)Established)Companies) When asking if there are any risks associated with established companies facilitating crowdfundinginitiativesjanwarhuusstatedthatcompaniesthatare too bigshouldnotbe allowedtousecrowdfunding,andthattherearedifferentrisksconnectedtocrowdfunding: Companies+ should+ be+ allowed+ to+ use+ crowdfunding+ ( ).+ Whether+ it+ is+ greed+ or+ tone+ deafness+from+businesses+about+what+is+going+on+the+platforms+i+do+not+know.+but+if+you+ just+come+in+from+the+right+with+a+corporate+hat+on+i+do+not+think+you+will+get+tuned+in+on+ what+it's+all+about+and+how+it+works (Warhuus2014). Furthermore, Jan Warhuus elaborated on what is needed for companies that decide to use crowdfundinginitiativetosupporttheirbusiness: Companies+that+want+to+use+crowdfunding+are+standing+on+goal+for+a+lot+when+choosing+ to+ go+ on+ the+ platforms.+ All+ of+ a+ sudden+ everybody+ knows+ if+ the+ companies+ are+ late+ or+ if+ something+goes+wrong.+if+companies+use+traditional+lending+options+such+as+banks+etc.+it+ is+only+the+bank+and+the+board+that+know+if+you+are+late.+so+as+i+say,+if+you+cannot+go+on+a+ wire+and+chew+gum+at+the+same+time+market+communication+wise+you+should+be+careful+ to+use+crowdfunding.+a+company+has+to+know+how+to+tackle+such+things+in+the+media.+you+ must+have+experience+or+someone+who+knows+how+to+deal+with+such+things+in+the+media+ and+in+direct+communication+with+all+the+backers.+so+it+is+a+lot+of+work+and+it+is+a+bigger+ mouthful+than+most+expect +(Warhuus2014). AccordingtoJanWarhuusestablishedcompaniesmustnotperceivecrowdfundingcampaigns astheperfectanswertoalltheirmarketingpayers.infact,establishedcompanieshavetobe reallyspecificif/whenusingcrowdfunding: Companies+ that+ already+ have+ a+ brand+ value+ and+ already+ have+ a+ customer+ base+ etc.+ should+consider+what+they+really+want+to+achieve.+in+fact,+crowdfunding+is+the+precursor+ to+companies+or+start5ups,+which+have+no+capital.+but+companies+that+are+over+the+ valley+ of+ death + should+ be+ careful+ to+ use+ crowdfunding+ as+ the+ companies+ could+ suffer+ from+ mistrust+or+loose+their+legitimacy +(Warhuus2014). 70

72 JanWarhuusalsosuggestedthatestablishedcompanieswhoseecrowdfundingasabrilliant businesstooldonotnecessarilyhavetouseanyoftheplatformstosucceedfromthecrowd. Infact,JanWarhuushighlightedthat established companies can be just as successful by creatinga crowdfundingcampaign ontheirownwebsiteorsocialmediaplatforms: If+ you+ already+ have+ a+ fan+ base+ and+ you+ want+ to+ engage+ with+ your+ customers,+ you+ can+ easily+ make+ your+ own+ crowdfunding+ campaign+ on+ your+ social+ media+ platforms.+ In+ that+ way+it+seems+less+like+ panhandling,+and+you+can+achieve+the+same+results.+i+believe+that+if+ you+do+that+you+will+have+to+follow+all+the+rules+of+crowdfunding +(Warhuus2014) 4.3)Reflections) Based on the findings this section aims to connect the literature and the findings togain knowledge regarding the various factors of crowdfunding initiatives, i.e. what drives companies to facilitate crowdfunding initiatives, and what should be in place before being abletomakesufficientuseofacrowdfundingcampaign? Thefirstsection,however,willfocusonMikkeller scurrentlyuseofsocialmedia.socialmedia isusedastheirprimaryandonlywayofcommunicatingandsharinginformationwiththeir customers. This means that Mikkeller rely heavily on other people telling their peers about their brand. Mikkeller does not have a fullatime employee, or expert on social media marketingtobeinchargeofthecommunicationonline.however,alltheemployeesgenerate the information shared on the social media platforms. This can, to some extend, potentially causeinformationoverload,duetothemanydailypostings.furthermore,therearenogiven rules or social media strategy, which means that the employees at Mikkeller are posting variouscontentontheirsocialmediaplatforms.andsincemikkellerisacompanythatisin increasinggrowthseveryyear,duetoexpansionsandpenetrationsintonewmarkets,thelack ofconsistencyorstrategyinregardstotheirsocialmediamarketingcouldpotentiallyharm thecompanybecausetheircustomerscannotdifferentiatewhoispostingthecontent. 71

73 WhenviewingonthefindingfromtheinterviewwithJacobGramAlsinghewasputtingalot ofemphasisonthefactthatalltheemployeesatmikkellerare telling +lotsofstoriestotheir fansontheirsocialmediaplatforms,howeveritseemslikemikkellercouldbenefitmorefrom interacting with their fans. According to customer engagement marketing cycle it seems thereisagapbetweenthe providing+service+experiences +and entice+to+stay+in+touch,whichis suggested to be one of the first stages to create customer engagement (Goodman 2012). Moreover, Mikkeller is trying to involve their customers in their marketing activities by stating We+want+to+involve+customers+in+both+extremes+5+from+the+extreme+fans+to+the+unhappy+ customers +(Alsing2014).However,ifMikkellerwantstoincreasetherelationshipswiththe customers, the literature on social CRM(Braid& Parasnis 2008) suggests that the company shouldgivemoretangiblerewardsinreturnforthetimethecustomersuseoninvolvingon thesocialmediaplatform. Furthermore, according to the findings from experts Mikkeller should more focused on building a clear social CRM strategy to better manage and interact with their existing customers/fans.thismeansthatifmikkellerwantstoincreasetheprobabilityofgettingmore brandadvocatestheywillhavetolistenmoretowhatthecustomerswantinsteadofmerely posting information about what Mikkeller thinks the customers want tohear. By using the methods learned from the literature on social CRM and relationship marketing (Alt & Reinhold2012;Palmatier2008),whichimplythatcustomersaremorelikelytoengagewith the brand if the customers get the feeling of trust and commitment from the company, Mikkeller could attain an increase of customer engagement. Moreover, if the strategy is applied thoroughly the increase of gratitude could create a longaterm relationship with its customersandincreasebrandloyaltyandadvocacy. Also,ItalsoappearslikelythatMikkeller smindsetaboutcollaboratingwiththeircustomers to develop new products is on the right path, however, it needs to be improved or implemented better. Jacob Gram Alsing told that Mikkeller occasionally ask people on Facebook if they have inputs regarding new brews, but that the majority of the time they basically just inform their followers on the social media platforms about a new beers, products,events,andpersonalstories. 72

74 When asking what the main drivers to facilitate a crowdfunding campaign, it became clear thatmikkellerwantstoattractandengagemoreintenselywiththeircustomers,andthrough the crowdfunding campaign build relationships with their customers, and bring in valuable ambassadorstohelpspreadinginformationabouttheirbrandtotheirpeers.anotherreason for facilitating a crowdfunding campaign is according to Jacob Gram Alsing that Mikkeller alwaysstrivestodothingdifferently,andtrynewthings,andhehopedthatacrowdfunding campaign could create some media attention, and through that attract more valuable customers. Accordingtotheliteratureoncrowdfundingmotivations,oneofthemaindriverstofacilitate crowdfunding initiatives, besides raising capital, is to generate engagement with potential customers and gain knowledge about customeraperceptions of the product. Moreover, entrepreneurs who facilitate crowdfunding initiatives do it to explore the market potentials i.e. potential sales volume, target groups, uncover key influencers, and communities. It became clear that when interviewing the experts and statements from other sources, that established companies are resorting to crowdfunding platforms as a substitute/supplement totraditionalmarketingactivities.findingsalsouncoveredthatcrowdfundingformarketing purposes, is a naturally evolution social media marketing within established companies. It alsobecameclearthattheadvantagesoffacilitatingacrowdfundingcampaignaretheability toinvolvecustomersearlyintheprocessandreducemarketingcosts. AsMikkellerisontheedgeofcreatingacrowdfundingcampaign,andbecauseMikkellerisan established company Mikkeller has to consider various factors. The experts expressed that established companies might benefit positively from crowdfunding initiatives if the companies are sufficiently suited for the task. In fact, according to Jan Warhuus (2014) companies have to follow the exact same rules as startaup companies when it comes to creatingacrowdfundingcampaign. Oneofthefactors,whichbecameclearwheninterviewingtheexperts,wasthatthecompanies havetobeawareofwhattheywantfromthecampaigni.e.theoutcomeandthevaluetheyare striving to achieve. This means that if companies lack from transparency or if the value proposition is not clearly explained, they could suffer from negative response from the 73

75 customers (Bock et. al. 2014). This could potentially create mistrust and damage their organizational legitimacy. When turning to the crowd companies have to understand that theymightjeopardizetheirlegitimacy.thepitch,i.e.thevideoandtext,whichthecompany put on the platforms, has to clearly indicate what the company is trying to achieve. This means that transparency is crucial, and that the company gives as much information as possible when the customers ask and expresses their opinions towards the product. According to organizational legitimacy theory this implies that there has to be a clear correspondence between the social values associated with the activities and the norms of acceptable behavior in the larger social system (Bock et. al. 2014). If it is not the case this could potentially damage the company. However, if the campaign is well communicated companies can create a dynamic environment, which then can nurture and increase organizationallegitimacy. Moreover,afterreviewingthefindinginaccordancetotheliteratureseveralconnectionscan bedrawnfromsocialcrmandrelationshipmarketing.first,theliteratureandfindingsshow that companies, which facilitate a crowdfunding campaign, might discover different challenges.thisinvolvesthatacompany,suchasmikkeller,firstofallhastounderstandtheir network capabilities, which means the ability to understand what the customers want comparedtowhatthecompanythinktheircustomerswant. Second, companies have to be capable in activating their network connections. This can be donebydiscoveringleaduseroraskingfans.onceagainitimpliesbeingtransparentwhenit comes to the communication of the crowdfunding goal. By building relationships with customerscompanieshavetheabilitytofurtherincreaselegitimacy.thisbecausecustomers via interaction and collaboration with the company gain trust and get the feeling thatthe companyisinterestedinconnecting/interactingwiththem.thisisoneofthemaindriversin relationshipmarketing,whichindicatesthatifthecompanyactivelyinteractswithcustomers the company has the opportunity to build longaterm relationships with their customers (Palmatier 2008). Furthermore, relationship marketing is focused on commitment, which impliesthatacompanyneedstoputmaximumeffortstoensurethattherelationshipwilllast. Since commitment is viewed as a social bond, which suggests that the degree of personal friendshipandlikingsharedbyabuyerandsellercancreatestrongerbondsandleadtomore 74

76 engagement,boththecompanyandcustomermustcommittoeachotherinordertosatisfy with the service. Moreover, communication in relationship marketing means providing information that can be trusted. The processes of establishing relationships require communication, trust, and satisfaction between both company and customer. Active communication contributes remarkably to the creation of a strong bond between the companyandcustomer. Third,companieshavetobeawareofhowtheircanexpandtheirnetwork.Thismeansthat companies need to understand the marketing strategies connected to crowdfunding. The findingssuggestthatcompanieshavetobuildanonlineaudienceofsupportsthatsharesthe same interests prior to a campaign. This fact is clearly aligned with what Hui et. al.(2014) foundtoberequiredfromthecrowdfundingcreator.writingpersonaltargetedmessagesto existingcustomersandinfluentialbloggerswiththegivenindustrycouldpotentiallydothis (Vaskis2014). Fourth, companies have to be able to follow+ through, meaning that when a company facilitatingacrowdfundingcampaignmustmakesureofdeliveringthenecessaryinformation regarding the project goals, and furthermore they must show that they are capable of providingthepromisedrewardstotheirbackersintime(huiet.al.2014).ifthiscannotbe donethecompanyhavetobereallytransparenttowardsthecrowd,integratingthecustomers ineveryphaseofthecampaign(warhuus2004;vaskis2014). As the literature suggest social media applications have a strong impact on relationship betweencompaniesandcustomers,andtheaccessibilitytocommunicatewitheachotheris remarkable.companiescanutilizesocialmediaapplicationstocreatepersonalcontenttothe customerswhowantstosupporttheircampaign.itisacrucialfactorforacompanythatthe internal culture of the organization is running efficiently, and that the organization is committed to the campaign. If a company is dedicated and loyal to the campaign customers will too. This enables a company to attract key customers and build a close relationship to them. According to Goodman(2012) this leads to customer endorsement. Furthermore, the ultimate outcome for companies using crowdfunding is that their backers tell their peers about the campaign. When doing this, backers are adding value to the company by sharing 75

77 content, and then being advocates for the company. As suggested in the literature on customer engagement customers who become advocates for a product can influence the purchasingdecisionofotherinpeeratoapeerinteractions(sashi2012).+ Fifth, a company, which creates a crowdfunding campaign, has to acknowledge the importanceofreciprocateresourcesbacktothecrowdfundingcommunity.thismeansshow theirgratitudetotheinvestorsinvolved.bydoingthis,thecompanyhastheabilitytocreate evenmoreawareness,asthegratitudeshownwillcreateafeelingofreturningthefavorfrom thebackers pointofview.thismightleadtoafeelingofbelongingtoagreatercause,and subsequentlyincreasebrandendorsement. 76

78 6.)Discussion,)Implications)&)Conclusion) Inthisfinalchapterofthepaper,Iwilldiscussthefindingsoftheresearch,i.e.thetheoretical andpractical implications. The chapter will aim to answer the research question andsuba questionstoconcludethepurposeofthisstudy.furthermore,thischapterwillpresentsome managerialimplicationsthatmayallowmanagersandexecutivestoefficientlyandeffectively usecrowdfundingfortheirmarketingactivities.moreover,suggestionsandrecommendations are provided for better utilization of crowdfunding initiatives. Lastly, the conclusion summarizes the finding from the research, as well as acknowledging the limitations of the research,andsuggestionsforfutureresearch. 6.1)Findings) The business landscape is changing rapidly; the dynamics of organizations, customers and resourcesarechangingsimultaneouslywiththefinancialmarketandtrends.thetheoretical implications from this study consider these characteristics as drivers behind crowdfunding. Whilethedriversbehindcrowdfundinghavebeenknownfordecadestherearestillseveral knowledge gaps within the phenomenon of crowdfunding initiatives. Most of the gaps lies within the area of how to successful create a crowdfunding campaign, it being from an individual point of view or from a company pointofview.although crowdfunding is highly connected to social media activities scholars are trying to create algorithms, looking at datasets to explain how numbers of followers or numbers of likes can create successful crowdfunding. Moreover, scholars are investigating the motivational dynamics considering whyindividualsarebackingstartaupsanduniqueideasonthecrowdfundingplatforms.what isofgreatinterestsforthisstudy,ishowestablishedcompaniescanbenefitmorefromsocial media activities to increase the probability of succeeding from crowdfunding initiatives. Successmeaningreachingthefundinggoal,butalsoindicatesbuildingvaluablecommunities, consistingofkeyindividuals,whobecomeactivebrandadvocates. Although customer engagement has been an important factor from the companies point of view for many years, the majority of the companies do not know how to efficiently and effectivelyinteractwithcustomers,especiallythroughsocialmediaplatforms.inthisvolatile businessenvironmentcustomershavetransformedfrommeretargets,i.e.passivebuyersthat thecompaniescouldpushproductsandofferingto,tovaluablecoacreatorsandactiveopinion 77

79 contributors demanding more customized offerings and personal twoaway communication withthecompany,andnowinthe age ofcrowdfundingalsotoinvestors,whichmeansthat thecustomersarebecomingevenmorepowerfulinregardstoevendecidingwhatproducts should be on the market.thisshift,together with Internetandtechnology advancements, customer interaction is also changing. The everachanging usage and importance of social mediahasprovidedorganizationswithcommunicationdifficulties.organizationsneedtobe capable to constantly renew themselves, reacting to the growing demands from all the stakeholders, andlisteningclosely to what create value for customers. Consequently, the valuepropositionisthereasonthatcustomerschooseoneofferingoveranother.socialmedia has become a powerful platform where customers share their opinions online among their peersabouteverythingthatisimportanttothem.also,socialmediaplatformshavebecome theprimaryplacewherecustomersseekinformationandcommunicatewithcompaniesand brands. Communicating with customers has been proven to be difficult for certain companies to do effectivelyandsuccessfully.thismeansitisnolongerenoughforcompaniesmerelytoshare product information, and use social media for advertising. Companies need to engage with consumersinawholenewanddynamicway.furthermore,sincethemostcommunicationhas been moved to the social web, organizations are using the social web to nurture their legitimacy. Although organizational legitimacy has been recognized by organizations as a strategically important asset for decades, the way organizations are using it in today s explosive market mightnotbeenoughtocreateorsustainlegitimacy,becauseofthecriticallyimpactthatthe customers have on organization. In order to create and maintain competitive advantages, organizationsneedtobeabletoreneworadaptthemselves,andexplorenewmarkettrends toattractandsatisfystakeholders.thefeaturesofweb2.0anditsapplicationshavechanged customerengagementandinteraction,andthenewfeaturesofcrowdfundinginitiativeshave nowgivencompaniesawholenewwayofcommunicatingwithcustomersandviceversa. 78

80 6.2)Managerial)Implications) Social(CRM( Social CRM to some extend relates to crowdfunding initiatives. It consists of management techniquesfororganizationstoestablishsocialmediapresenceandnetworkingcapabilitiesto communicatewithconsumers/customers.socialmediahasbeenacknowledgedasthecenter forinteractionandcollaborationbetweenvastamountsofusers. Companies can use external services, like Facebook or Twitter to extract the opinions, experiences, and requests from the users. With minimal investment and implementation effort companies can establish a direct contact with customers. By monitoring their social media platforms manually it is possible to extract marketingarelevant information about consumersentiments,behavior,andreactions.however,itcanbeadifficulttaskforsme sto managevastamountsofusercontent,anditimpliesconsiderableeffort. Therefore,itispossibleforcompaniestoimplementanalyticaltechniquesformonitoringand mining, i.e. identification of relevant contents and actors/customers. By using more automation enable the companies to monitor and identify companyarelevant information from the social web. By fetching data concerning the company, products, and postings from users,companiescaninterpretandidentifysentimentsandthecontextofcontent.however, SMEsneedtolearnandbetterunderstandhowtosufficientlyextractthe rawdata fromtheir social media platforms andanalyzeonthedata.however,itcanbean enormous taskfora small company, but on the other hand it could potentially give companies valuable insights aboutacompany sproducts. Moreover, companies will need to be capable to use management functionalities more sufficiently. Reputation management and evaluation offer a comprehensive view in social CRM activities. Still, it implies data integration and requires the capability of connecting contentfromdifferentsocialmediaplatforms,whichforsmescanbeadifficultandmassive task. SocialCustomerRelationshipManagement,whichmeansuseinformationfromsocialmedia, e.g. contact data and postings, requires a comprehensive integration of interactions 79

81 techniques. In SMEs it can be a big task because it implies extensive understandings about content delivery, dialogue development, publication, dissemination or recommendation, wheretheobjectiveistomakeproactiveandreactivecommunicationwithsocialmediausers. These techniques enable companies to gain knowledge about customer value. Moreover, informationfromthesocialwebmayenrichtheexistingofferings,i.e.productsorservicesby evaluationsorsuggestionsfromotherusers. Relationship(Marketing(( The opportunities that relationship marketing offers to organizations are notable regarding crowdfunding initiatives from established companies. By building longaterm relationships with customers companies get more loyal customers, whothenactasanextensiontothe promotion of products. As crowdfunding relies on attracting backers, the first step towards successful crowdfunding is to have a vast amount of enthusiastic and loyal people in your online community to spread the word. And within the relationship marketing theory it is suggested that if companies manage to engage with customers in a satisfying way the customers are more likely to feel obligated in returning the favor, meaning spreading the message to their peers. However, it demands a lot of effort and investment from the companies, i.e. time and management skills. Therefore, SMEs might have to select key employees to take care of customers relationship tasks to be able to benefit from it, as customerrelationshipsaresomethingthatisbuildovertime.customermanagementbecomes extremely important for a successful implementation and commercialization of a crowdfunding campaign, and further engagement in a company s products. Capturing engaged customers through social media platforms offer organizations countless opportunitiestofurtherenhancethevalueoftheirofferings.intheprocessofselectingand identifying important customers both the crowdfunding platform and other social media platformsplayanimportantrolefororganizationalsuccess. The process of achieving customer engagement does not happen over night. It is a long processwherecompanieshavetoinvestalotofresources.oneofthemosteffectivewaysof doingthisisbyprovidinguserswithmemorableserviceexperiences,whichletthecustomer differentiate one company from another. Furthermore, companies need to entice their customerstostayintouch.providingyourcustomerswithpersonalandtargetedinformation 80

82 orgratitudeimmediatelyafteratransactionisdonemightdothis.afterthetransactionitis criticallyimportanttoinvitetheconsumer/backertoparticipateintheconversationwiththe company. By encouraging the backers to be involve in the process companies might get valuableinsightsfromexternalsourcesaboutfurtherdevelopmentoftheproductorservice. Thefeelingofbelongingtoagreatercausemayresultincustomersgettingmoreenthusiastic about the brand or product, which then might lead to customers spreading information to theirpeers,whichpotentiallyattractsnewcustomers. 6.3)Conclusion) ThispaperpresentstwomethodsthatcanbeusedforbuildinglongAtermrelationshipswith customers using social web activities. The study particularly investigated how established companies (SMEs) can utilize social media tools to increase customer engagement for crowdfunding initiatives. The crowdfunding platforms are relatively new, especially in connection to customer engagement and for marketing purposes. In today s business landscapetheimportanceofbuildingcustomerrelationshipsandcustomerengagementhave become clearer, as the need for companies to interact with customers to increase and build organizational legitimacy, andbrandadvocatestoenhanceofferingsandawareness, have become vital to grow their companies. Crowdfunding is fundamentally about raising capital fornewventuresandstartaups.however,establishedcompaniesarestartingtomakeuseof crowdfundinginitiativeasanewsocialmediaamarketingtool,identifykeycustomers,andto engagewiththem. Thepaperidentifiedanumberofdriversandtechniquesfororganizationstobuildandattain customer engagement for marketing purposes. The research showed that companies that wanttofacilitateacrowdfundingcampaigncouldbenefitfromimplementingvariousfeatures frombothsocialcrmandrelationshipmarketing.onethingbecameclear,therearenogiven indicators that can predict crowdfunding or social mediaamarketing success. Furthermore, using social CRM and Relationship Marketing require a lot of effort from the organizations, whichcanbeproblematicinsmes,wheretheemployeesoftenhavevariousresponsibilities. Companieshavetobeextremelyawareofmanagingtherelationshipswiththeircustomerson thesocialmediaplatformsinordertobenefitformsocialcrmandrelationshipmarketing.to successfullyincreasecustomerengagementcompanieshavetoinvesttime,involvecustomers 81

83 inallphasesofthecampaign,andmakethemfeelasapartofthecompany spromotionteam. Companiesneedtolistencloselytocustomerneeds,andfurthermore,buildtrusttobeableto successfullybenefitfrombothsocialmediamarketingandcrowdfundinginitiatives (Limitations(Of(The(Study(&(Further(Research( There are a few limitations, which need to be addressed and considered in regards to the results of the study. Firstly, in an exploratory study like this on time is a limiting factor. In ordertoresearchthelinksbetweenthecrowdfundingplatformsandcompany ssocialmedia platformsandgeneralizetheirapplicabilityinabroadercontext,thelinksshouldbestudied overalongerperiodoftime,perhapsevenyears.moreover,towhollyunderstandthedetailed processes that lies within social media marketing activities in a company, and furthermore, the communication between customers and company one would need to immerse into the company. Only after such scrutiny and time span a more concrete conclusion can be drawn about the success rates of both customer engagement and crowdfunding. Secondly, generalization and best guesseson the findings of a single study is inadvisable and thus further research is needed. Thirdly, throughout this study I have aimed to stay completely objective, however, my inherent perspectives and mindset as a student of Strategic Market Creation,andastudentassistantatMikkellerApSmayhaveinfluencedtheresults.Lastly,as social CRM and Relationship Marketing are actively used at Mikkeller ApS, and the fact that crowdfunding initiatives from more established companies, especially in the brewing industry, are relatively novel the results of the case study is based on assumptions of the interviewees. Studiesoncrowdfundinghavebeenlimiteduptonow.Mostofthestudiesoncrowdfunding sofarhaveanempiricalnature,e.g.agrawalet.al.(2011)ormollick(2014).theirpurposeis tobetterunderstandthemotivationsoffundersandfundraisers/creators,andtouncoverthe successfactorsofcrowdfundingcampaigns.althoughthesestudieshavedeliveredinteresting insights,furtherresearchoncrowdfundingneedstobestudiedbytheoreticalanalyses. Oneofthestudies,whichIseeasoneofthefirststepsinthefieldoftheoreticalanalysison crowdfundingisthestudybybelleflamme,lambert,andschwienbacher(2014).theyargue that crowdfunding has implications that go beyond the financial sphere of the firm. As they suggest crowdfunding also affects the flow of information between entrepreneurs and 82

84 contributors.theyalsosuggestthatraisingmoneyisnottheonlystrongmotivationfromthe entrepreneurs pointofview.othermotivationsforresortingtocrowdfundingareperceived asequallyimportant.specifically,gettingattention,i.e.reducedmarketingcostsandobtaining feedback,i.e.markettestingandmarketvalidation.furthermore,crowdfundingcanbeused asapromotionmethod,asameanstosupportmasscustomization,userabasedinnovation,or to gain a better knowledge of the preferences of its consumers. However, this is only one study. Therefore, deeper studies and perspective on these dimensions could be valuable contributionstobetterunderstandthedynamicsofcrowdfunding.moreover,studiesonthe effects of social media activity,suchas followers, likes, and sentiments should also attain more attention from scholars to better understand the impact of followers and likes might have on crowdfunding success. Asur and Hubermann (2010) demonstrated how Twitter activitycanbeusedtopredictboxaofficerevenuesofmoviesinadvanceoftheirreleaseand advocated that this method can be extended to other products of consumer interest. The study shows that social media activity can be used as a proxy for the public attention on a subjectandthatthisattentioncanbeusedinpredictingproductperformance.datacollected on a subject over time can be fitted into a linear regression model using least squares. The linearregressionmodelcanbeexpressedas:( y=βaxa+βpxp+βdxd+ϵ,( whereydenote therevenuetobepredicted,ϵtheerrorandwheretheβavaluescorrespondtotheregression coefficients.( The model includes the following parameters to capture thebuzzaroundthe productonsocialmedia:a:rateofattentionseeking;p:polarityofsentimentsandreviews;d: distributionparameter,i.e.itcanreflecttheiravailabilityinthemarket.( Lastly,inthelightofthisstudyitwouldbeinterestingtoconductnetnographicanalyseson variouscrowdfundingcampaignmadebyestablishedcompaniesandstartaupstoinvestigate ifthereanysignificantcorrelationsexists.thesecontributionscouldpotentiallyenlightenthe ongoingdebateinnumerousways. ( 83

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93 8.)Appendices) ) Appendix)I)^)Interview)With)Jacob)Gram)Alsing)(2014)) JacobGramAlsingbegyndtemedatfortælleomhvordandehosMikkellerarbejdermed socialemediertildaglig.entingsomjacoblæggermegetvægtpånårdertalesomsociale mediereratdeterenopgavesomallevaretagerhosmikkeller.somhanselvsigerdet: Alle medarbejderehjælpermedpromoveringenvedatposteogdelepersonligeoplevelser informationpåfacebookogtwitteroginstagram.derudoverfortællerjacobomderes marketing Vierikkedennormalevirksomhed,somharenfuldtidsmarketingmanagersom hartilansvaratskriveinformationomvoresprodukterellereventstilvoreskunder.vi brugerrigtigmangeresurserpåmarkedsføring,menvibrugeringenpenge.vivilogsåhelleri direktemedvoreskunder,ogvigørdetvedatfortælledempersonligehistorier,ikkevedat sætteplakateroppåtrianglenellerandresteder. DajegspurgtehvorforMikkellerikkeharenprofessioneltilatvaretagederes marketingsopgaver,nårdeskalkommunikeretilover40landefortaltejacob: jegtordetvil bliveforuærligtogforstatisk.vivilværerebelleniklassen,ogsåmåviogsåacceptereatder ernogleslåfejlpåvoresfacebookside.derefterfortaltejacobathannæstendagligt modtageransøgningerfravirksomheder,somtilbydermikkelleratvaretagederes kommunikationprofessionelt,menatdealtidfåretkort,menbestemtafvisning.jacobmener ikkeatprofessioneltkommunikationervejenfremogsletikke,hvismanønskeratskabe nogenformforværdiforbådevirksomhedenellerkunderne. Jacobfortalteatdesætterstorprispåallesomgiderbrugederestidpåatskrivenogetpå mailellerfacebook.ogatdebrugerkommentarerfrakunderne/fansene,menogså kommentarerfrautilfredseogligefremsurekunderideres marketingstrategi.jacob fortællerenhistorieromatdervaretbarnsomvarblevetopkaldteftervirksomhedenogom enrasendekundesombareligevilfortælleathunhavdedrukketenmikkellerølogdetvar denværsteølhunnogensindehavdesmagt.hansigerat vivilgerneinvolverekunderfra beggepoler deheltekstremefanstildemegetutilfredse,vivedbareikkehvordanvigørdet ordentligt. 92

94 DajegspørgerJacobomMikkellererenvirksomhedsomforståratinvolvererogengagerer signokihvaddereskundersigeroggørogomdeburgerdereskundernokiudviklingenaf nyeprodukterfortællerjacobatdenoglegangespørgerderesfølgerepåfacebookomideer tilnyeprodukter,menatdeheltsikkertkunnegøredetendnumereogendnubedre. DerudovernævnteJacobatdetkanværesværtatværerebelleniklassenogsåligepludselig spørgeomhjælp.jacobfortællerat vivedjogodtdethelehandleromatsælgeøltilvores kunder,ogviudviklerkonstantnewtyperøl,somudfordrermarkedetogvoreskunder samtidigerviogsåmegetbevidsteom kundenharaltidret,menvierogsåmegetbevidste omvoresegnekompetencer ogligenusælgervidetølviproducerer. EfterfølgendeforklaredeJacobatMikkellererenetableredevirksomhed,menatdealdrigvil ladevirksomhedenbliveetkonservativvirksomhed,ogatdegørogvilgørealtforatudvikle ogpressedegrænsersomfindesiindustrien.ifølgejacobgørmandetvedatgøre virksomhedenendnumereåbenoginvolverekunderneendnumereihvadderskeri maskinrummet. DajegspørgerJacobomhvordanhanvilvurdererMikkellerslegitimitetforklarerJacobathan trorgrundentilatmikkellerharudvikletsigtildetbranddeteridagerpga.deharlykkedes medatfortællepersonligehistorier,ogathantroratkundernesætterstorprispåde personligehistorier,ogatmikkellernokikkehavdeværetdetbrandidag,hvisdebarehave lavetheltalmindeligmarkedsføring.jacoberogsåoverbevistomatmikkellererbleveten legitimtvirksomhedfordideikkesætterfingreimellem.hanfortællerat:jegtrorfolkkøber voresprodukterfordiviergodetildetvilaver,ogfordiviikkeerbangeforatfortællefolkom det,ogsåtrorjegfolkelskeratviersåudanskesomvi,ogviegentligopførerossom rockstjerner.derudoverfortaltejacobatmikkellerabrandetstadigihøjgraderbyggetpåden oprindeligehistorieommikkeller,somerheltnedepåjorden. Historienomhvordan skolelærerenmikkeltransformeredeetsimpelthobbyprojekttilenverdensomspændende forretningssucceserrimeligsimpeltenhamrendegodhistorieisigselv.sånårmanharen historiesomden,samtidigmedvirkeliggodeprodukter,ølevents,ogdedikerede medarbejder,sominteresseresigfor ogtrorpåbrandet ogderforskriverhistorieruden jegbederdemomdet,såtrorjegatkundernekanmærkeægtheden. 93

95 JacobGramAlsinggjordedetdogklartatMikkellerisidsteendekanrisikereatbliveofferfor sinegensuccesogsagdeat spørgsmåleter,hvordanviopretholderetrysomet undergrunds'abrand,mensvirksomhedenistigendegrandvokserogblivertiletmere internationaltbrand.deternoget,vivilaltidhaveitankerne. NæsteemnehandledeomMikkellerskommendecrowdfundingeventyr.JegspurgteJacobom hvortankenomatbenyttesigafcrowdfundingkomfra?jacobsvaredeat "Vi(MikkelogJacob)ønskeratbringeambassadørerindforatstyrkebrandet,ogvibeggehar læstnogleartikleromcrowdfundingogtænktedetlødfedtognogetnytsomvivarnødttilat prøve" Jegspurgteomvigtighedeniatcrowdfundinghandleromatsamlepengesammen.Jacob svaredeatideenomcrowdfundingkampagnenhandledeommegetmereenpengene,menat detselvfølgeligosbetydernoget.formikkellerhandlerdetomatfåbyggetopbyggeten kulturogetendnustærkerenetværkomkringhvadmikkellerlaver,ogathanhavdelæstat crowdfundinghandlermegetomatkunnefindedebedstekunderogdragefordelafde forbindelser,somsocialemediergivermulighedforathavemedenskunder. JegspurgteomhvilkenværdihantroedecrowdfundingkampagnenkunnetilbydeMikkeller. Jacobsvaredeat"Denprimæreværdivilværeatskabeambassadører,deropleveret medejerskabiprojektet.voresbranderihøjgradbyggetpå"mundtilmund",ogderforer skabelsenafambassadørerafgørendeforatspredeordetomos.derudovererderikkemange danskevirksomhedersomharkastetsigudistorekampagner,ogderforforestillerviosat derkanbliveskabtenmassemedieomtaleomkringprojektet".jacobforklaredeogsåathan haderjantelovenogatdeterendnuenfaktorsomervigtigvedatlaveencrowdfunding kampagneselvommikkellernuerenetableredevirksomhed.hanfortalteat vistræberefter atværeanderledes,viforsøgealtidatgøretingenepåenanderledesmåde.deternæsten blevetvoresmantraatgøreuventedetingene dukankaldeosriskatakers. DajegspurgteJacobomhankunnesenoglefaremht.derescrowdfundingplanerbegyndte JacobattaleomStone skampagne.jacobfortalteathanblevensmuleoverraskededahan hørteomstoneskampagne,ogathanfaktiskblevenanelse pissed fordihanfikenfølelseaf atmikkellerikkekunnegøredetnu,nårdernuvarenandenvirksomhedindenforsamme 94

96 branchesomgjordedet.dahansåseneresåatstonehavevanskelighederibegyndelsenblev hanogsåensmulenervøsomkringdereskommendecrowdfunding. Han fortalte Jeg var vidne til at et selskab var en kanten til at miste alt, hvad de havde udretteta18årshårdtarbejdeblevnæstenødelagtafencrowdfundingkampagne.dajegså detblevjeglidtbangeogbegyndtefaktiskattvivlepåvoresegneplaner"+ Jeg spurgte Jacob om hvordan han så Mikkellers crowdfunding planer i forhold til Stones. JacobforklaredeatMikkellersplanervartotalanderledes.Mikkellersplanhandledeikkeom at sælge øl igennem en kampagne, men om at skabe et unikt netværk med en masse ambassadører som igennem køb af medlemsskaber ville føle sig som medejere og føle en formformedansvarformikkellerseksistensberettigelse. Jacobfortalte Vivilbringesåmangeengageretmenneskerombordsommuligt,vikommer til at kende alle involverede personligt, og vi vil kommunikere med vores medlemmer personligt. Til sidst forklarede Jacob at han syntes det virkede som om Stone ikke havde brugtnokkræfterpådereskampagne,ogatnårhanlæsteomdetvirkededetikkesomom Stoneengageredesignokihvaddereskunderskrev,ogatdetvirkedesomomatStonekun fokuseredepåatdereskunderskullekøbeenmasse. + ) 95

97 Appendix)II)^)Interview)With)Jan)Warhuus)(2014)) Åbning:( Kortintroduktionafmitspecialeogenforklaringomformåletmedmødet. ( Spørgsmål:( ( Hvorfor(tror(du(etablerede(virksomheder(begynder(at(benytte(sig(af(crowdfunding?( Detkortesvarerpenge.Mendeterklartatderliggermangeandretingunderoverfladen, somikkeblothandleromatfåenmassepengeskudtindivirksomheden.dererblevetlavet etparstudiersomnetopkiggerpå,hvilkefordelesomcrowdfundingkanmedfører.deter bl.a.markedsundersøgelse detvilsigeskaffedataomensproduktharetpotentieltmarked atkommeudtil detvilsigeatmansomvirksomhedforenformforgodkendelseafenside fraenmassefolk,somrentfaktiskvilkøbedetfærdigeprodukt.dererogså promoveringsdelenafnyeprodukter detvilsigeatmanskaberenmassestøjeller awarenessomkringenside.mendererogsåheledenderengagementdelafcrowdfunding. Dukanligepludseligskabeendialogmedenmassemenneskerfraheleverdensomkan kommemedideerogtankeromditprodukt.dissefordeleerjoibundoggrunddesammen somdetaltidharværetnårvirksomhederinddragerforbrugeretilatudvikleideertil fremtidigeprodukter.crowdfundinggiverdigblotetekstrainputogdeterpengetilat virkeliggøredinideudendubehøveratbrugeafegenkasseellerspørgebanken. Hvilke(muligheder(ser(du(i(forhold(til(at(bruge(crowdfunding(til(marketingsaktiviteter?( Enafdetingmanskalværemegetbevistomerat,hvismanikkekantyggetyggegummioggå pålinepåsammetid,sårentsocialtmediemæssigtsåskalmannokikkecrowdfunde.ihvert faldikkeidenstorestil.forsågårderaltidetellerandetgalt,hvisikkemankanfindeudafat kommunikeresigudafdetsåharmanetproblempåforhånd,såmanligesågodtladevære medatcrowdfunde. Derermereendengrundtilatfolkvælgeatbackeprojekter.Hvismanbegynderatkiggepå dederbackers,såerdernokendemografiskforskelmellemdemsombackerogdemsom 96

98 ikkegør.ogjegtroratvimedtidenfårenforståelseom,hvemdeherbackersivirkeligheden er.udoveratdetstartermeddetref er,friends,familyandfools,dereftererdetsåditløsere netværkogdereftererallemuligeandresomhøreromditprojektfordidetharfåetsineegne benatgåpå.menhvisvisnakkeromdetrewardbased,ellerihvertfaldhvormanfåreteller andetigen,omdeternaturalierellerandet,menihvertfaldikkeaktierellerejerskabsåerdet jopåenellerandenmåderewardbased,ogsåselvommanharenellerandenformfor folkeaktie,hvormankankommeetpargangeomårettileteventellerengeneralforsamling etc.såerdetstadigenellerandenformforrewardbasedviljegsige. Dederrewardbasedbackers,jegtrordererendelafdemsomkanpasseindelleride almindeligemarketingssegmenterellerrammersomheavyusers,firstusersogderharjeg noglegangesammenligetdetmedatselvomproduktetikkeeksistererendnu,hvisdutrorpå demderlaverproduktetsåfindesdetstadigfordigkanmansige.såhvisduvilindogståikø foratkøbedensidstenyeiphone,denhardujohelleraldrigbrugtendnu,altsåduerjoikke sikkerpåatdenerbedreendenduhariforvejen.duharlæstnogetomdenellerhørtnoget omden,duharsetetbillede,sånødvendigviserdetjoikkesåmegetforskelligtfraatvære backertiletellerandetproduktsomogsåerheltnyt,mensomdutrorpåvileksistereom seksmåneder,såjegtroratdemsomstårikøtildennyeiphoneogsåerdemsomerbackers. Jegtrordererenmassemenneskersomermegetinteresseretietproduktoggernevilhave det,oggernevilværedeførstetilatbrugedet,ogogsåervilligetilatfåenbetaversionforat væremedtilattestedetosv.ogdertrorjegogsådukansammenlignedetmedfolksomogså testersoftware,ellerdemsomharoversatfacebooktildanskoggjortdetgratis.såhvorfor gørfolkdet?deterlidtdetsammespørgsmål.ogderernogleintrinsicrewardsidet,atjeg harværetmedtildetellerværetmedfrastartenogdererogsåenlæringfordemsomhar væretbackersfrastarten.omduermedtilatskriveetstykkesoftwaresåerduogsåmedat skrivenogethistorie.sådeterlidtligesomatværedelafenhverandenforening.jegtrorvi kanlåneendelfradenalmindeligemarketingslitteraturogfraalthvadderhedderopen source,crowdsourcing.detvivedderfrapassersikkertogsåudmærketpådeherbackers.at defåretellerandetekstraudafdet.dekanogsåtalemedderesvenneromdet. Jeghartaltmeden,somhedderThomas,somharlavetenvindmåleroggjortdetigennem crowdfunding.dersnakkedehanlidtom,atdetvarikkebareselvecrowdfundingperioden 97

99 somvarvigtigmenogsåperiodenefter.manerstadigenformforforældrefordederbackers iperiodenefteratmanerfærdigmedprojektet.ogderhavdehanetbilledemedafto englænderepåenmotorcykel,derholdteudforandereskontorfordidevarigangmedderes version2,ogdervarsåensomhavdeværetmedtilatbackdemdenførstegangogogsåden andengangoghanvarsåpåmotorcykelturieuropaoghavdesåbesluttetsigforatkøretil DanmarkoghelevejentilKøbenhavnfordihangerneselvvilhentehansversion2istedetfor atdesendtedentilham.såhanfårenoplevelse,somliggerudoverdetnormaleogdet engagementhanharietprodukt.såhanerjoenutroliggodambassadørfordetherprodukt. Såjegtroratdereralledederfirstuserogaltdet,somliggeriatværeengageretietprodukt sommanholderafogsommansyneserengodide,mensomikkefindesendnu.mensåerder ogsådenheltgenerelletendens,hvilketeratforbrugerneharforståetdetdermedatpolitisk medsinepengeogvælgedetrigtigeproduktafdemsomstårpåhylderne.detharmankunne gøreimangeår.derharværetetrelativtstortudvalg,hvordetikkebarehandleromatderer treslagssæbepulverogsåkonkurrerviallesammenomhvemderkanvaskehvidt,nej,derer megetmereenddet,enandenkompleksitetisådanetproduktidag,såsomhvadbetyderdet atvælgedetenefremfordetandet.ogafalledeundersøgelseafhvorforfolkvælgeatkøbe økologisk,hvorfordevælgergrøntosv.megetafdethandleromatmanvilhaveindflydelsepå det,såsåsnartforbrugernedekanse heyjegkanikkebareværemedtilatvælgehvadder stårpåhylderne,jegkanbestemmehvadderskalståpådehyldervedatgåindogbacke nogleprojekter.detengagementsommarkedsdeltagerdettrorjegforbrugerneidagermeget merebevidsteomenddevarforårtilbageogjegtroegentligbaredetersådanenforsættelse afdenlæringafhvaddetbetyderatværeforbrugersomharforegåetsidenderadikalefor30 årsidenietellerandettvudsendelsesagde atnårdugårindietsupermarkedogdusyntes dererformegetemballage,såskaldubaretagedetafogladedetliggeindeisupermarkedet ogsåtagvarenmedhjemistedetfor fordeterdigsomkøberproduktet.detder engagementersådannogetforbrugerenharlærtovertid.jegtrordererdetodele,atvi sådangenereltbarehareninteresseiatværemereengageretsomforbrugerogsåerderdet derspecifikkeomkringhvadvildetsigeathaveetstortengagementietproduktder involveressigidetogdererdermangeandretingsomvikanlånefra. Hvismankiggehvorfordetfravirksomhedernekanfindesattraktivtsåtrorjegdethandler omhvormegetkanjegsælge,hvadskalproduceresoghvor.såhvismangårudpåen 98

100 crowdfundingplatformsåerdetnoglegangeikkepga.pengene.detkanværeforatse,hvad dererafmarkedfordether.virksomhederkanvælgeatgøredetforatståidenbedre forhandlingssituationoverforensleverandører.såmangårdenvej(crowdfunding)foratgå denvej(leverandører).såhvismansersådanetbusinessmodelcanvassåermanheltudeog havefatikunderderikkeeksisterer,medetproduktderikkeeksistererendnu,menfaktisk foratståienbedreforhandlingssituationmedenspartnerehelthenneidenandenendeaf kanvasset.såvirksomhederkanfaktiskbrugecrowdfundingtilandetendatfåkapital,dekan ogsåcrowdfundesigtilenleverandørerellermarkedsfordele. Tror(du(crowdfunding(er(brugbart(som(et(decideret(markting(værktøj?( Jegtroratselvomvirksomhedernebrugeenmasseenergiogpengepåatlavekampagnerne, såbliverdetopvejetafdenomtaledefår.deterenstorfejlatsigeatdetkunerenformfor markedsføring jegtrorathvismankiggerpåsådanetcanvassåerderikkenogenafdeni boksemanikkekanblivepåvirketafsådanencrowdfundingprojekt. Virksomhedernekanfaktiskgåudpåimarkedetmednogetderikkeerklarendnu,sådeter ikkebareatdufårdettestetafvedatfåtaltmednogleinvestorerellervenner,mankommer faktiskhelevejenudimarkedetmednogetderikkefindesendnu.ogrentmarketingsmæssigt erdetmegetanderledesfordimanikketesterfolkpåpræmissen hvisdetherproduktfor 100kr.villedusåkøbedet.Såerdetbedreatfåtestetadfærdogherskalfolkfaktiskhave pengeopaflommen. Hvad(så(hvis(kampagnen(mislykkes,(er(det(så(en(fiasko?( Projektersomikkebliverfunded,demviljegikkekaldefiaskoer ogdetvilværeetstørre problemhvisaltblevfunded.dererviienfaseligenuhvorformegetbliverfundedogatder skalskeenellerandetshakeouticrowdfundingbranchen.viskalsomforbrugerlæreat forholdeostilcrowdfunding ogderviikkeendnu.såderforerderenmasseligenusom blivercrowdfunded,somikkeskullecrowdfundes. 99

101 Storevirksomhederburdeikkefålovtilatcrowdfunde,ligesomsmå ligegyldige kampagner ikkebrudekunnecrowdfundes.omdetergrådighed,ellertonedøvhedfravirksomhederne om,hvadderforegårpåplatformenedetvedjegikke.menhvismanbarekommerindfra højremedencorporatehatpåogtankegangsåtrorjegsletikkemanfårtunetsigindpåhvad deterfornogetoghvordandetfungerer. Virksomheder,sombenyttercrowdfundingstårpåmålforenormtmegetnårdevælgeratgå udpåplatforme.ligepludseligsåvedalledem,omdeerforsinketellernårnogetgårgalt. Hvisvirksomhederbenyttertraditionellelånemulighedersåsombankeretc.såerdetkun bankenogbestyrelsensomvedatmanerforsinket.såsomjegsiger,hvisikkemankangåpå lineogtyggetyggegummipåsammetidihvertfaldsådanrent markedskommunikationsmæssigtsåskalmanihvertfaldpassepåmedatcrowdfunde.man skalvidehvordanmantaklersådannogleting.duskalhaveenerfaringellernogender forstårattaklesådannogletingimedierneogidirektekommunikationmedalledeher backers.sådererrigtigmegetarbejdeidetogdeterenstørremundfuldenddeflesteregner med. Virksomhedersomalleredeharenbrandværdiogalleredeharenkundebaseetc.deskal overveje,hvaddeegentligvilopnår.ivirkelighedenercrowdfundingforstadiettil virksomhederellerstartaupsomikkeharnogenkapital.menforvirksomhedersomerovre thevalleyofdeath deskalnokværepåpasseligemedatcrowdfunde,fordivirksomhederne nemtkanbliveramtafmistillidellermisterdereslegitimitet. Hvordan(ser(du(crowdfunding(som(en( customer(engagement (channel?( Jegersikkerpåatmanharsinebackersilangtidefterogjegtrordukanbrugedemtilmange ting,ellerengoddelafdemtilmangeting.dererselvfølgelignogensombarevilhavedetder produktsåhurtigsommuligt,ogsomikkehardenheltstoreinteresse,menjegtrorderer mangeafdederbackers,somvisnakkedeom,hvorforerdetdeerbackersogatdender emotionelledelafdenhertransaktionatdenikkeforsvindernårdentransaktioneroverstået, denforsætter,ogatdeterdetmankanbrugetilnoget.jegtrorogsåderliggeretnogetstørre ogmeredirekteengagementhosenbackerendhosfx.enfacebookfollower.deterbaseret 100

102 påadfærdogikkeintentionerogfolkskalhavepengeopaflommenudenatfånogetfordem ligeherognu.pådenmådeercrowdfundingenformforsorteringmekanismedergiver adgangtilendidikeretgruppe(måskeikkedeneneste)afkunder.dererumådeligmange mulighederforatudnyttedenadgang.ogvirksomhedersomalleredeharenfanbasemed ægte fanskanbrugecrowdfundingtilnetopatfåflere ægte fans.dinekundersom bare kanlidedigharligepludseligenchanceforatbliveen del afdinvirksomhedfordideser deresbidragsomet jeghjalpdig support.efterencrowdfundingkampagneerditcrowd stadigdetvigtigsteaktivdufårudafensuccesfulkampagne.ditcrowdernublevetendelaf dinmarkedsføringogpromoveringsteam.deerblevetenslagsbrandadvocates,somkanøge dinbrandawarenessvedatdeleinformationvedforeksempelwordaofamouth.devilbliveen vigtigdelafditproductogserviceteam,somkanhjælpedigmedmarkedsvalideringog proof ofconcept. Hvad(skal(man(være(opmærksom(på,(hvis(man(som(virksomhed(vælge(at(benytte(sig(af( crowdfunding?( Hvismansomvirksomhedvælgeratcrowdfunde,entenommangørdetpåencrowdfunding platformellerpåsinegenhjemmeside,skalmangåigennemalledesammefaser,somstarta upvirksomhedernegørpåencrowdfundingplatform.alledesammereglergælder.detskal væremellem30til60dage,derskalværedetderurgencyfordetmanønskerfunded,derskal dederkategorierhvormankanengagepådederforskelligekategorier,derskalværenogle nyhederundervejs,derskalkommenogetnytundervejs.mansigeratmanfår1/3ideførste 3dage.Dentredjedel,nårderergået2uger,såskalmanhavefatidemigen.Fordi,derer noglemenneskersomhelstvilbrugemangepengeistedetforlidtpenge.oghvisikkedeikke harhaftmulighedforatbrugenok,hvorforsåikketagefatidemogfådemtilatbrugenoget merehalvejsigennemencrowdfundingproces.ogsånårcrowdfundingperiodenerovreså skalallehaveafvidehvormangeervi,oghvormegetharvicrowdfunded.menmanskalvære opmærksompåatallereglergælderligemegethvemmaner,hvormangørdetellerhvilket formålmanher. 101

103 Ser(du(nogle(fare(ved(forbundet(med(at(etablerede(virksomheder(benytter( crowdfunding?( Ja,dererihvertfaldenfarevedatudstråleenformfortiggeri,hvismangårudpåen crowdfundingplatform.specielthvisdualleredeerenetableretvirksomhed.dukangøredet klartatduvirkeligvilinvolvererdinefans,ogjegtrorathvisdualleredeharenfanskare,og duønskeratengageresigmeddinekunder,kandunemtlavedinegen crowdfunding kampagne pådinegensocialemedieplatforme.pådenmådelignerdetmindretiggeri,ogdu kanopnådesammeresultater.jegtror,athvisduvilcrowdfunde,erdublivernødttilatfølge allereglerneicrowdfunding. Debriefing:( Takfortiden,ogdeinputsomhangav.Enlillesamtaleomløstogfast. ) 102

104 Appendix)III)^)Interview)With)Dennis)Hørmann)(2014)) ( Åbning:( Kortintroduktionafmitspecialeogenforklaringomformåletmedmødet. ( Spørgsmål:( ( Hvad(er(for(dig(det(vigtigste(som(crowdfunding(kan(bruges(til(i(forhold(til(traditionel( fundraising?( TraditionelfundraisingiDanmarkerabsolutogsåpåvegneafvirksomheder,somstårog manglerpengetiludviklingafnyeprodukterosv.,ogcrowdfundingerbarekommetindover sidelinjenpåenellerandenmåde.jovihardaprøvetdetafpånuværendetidspunkt,mendet erikkevoreshovedfokusområde,menvihardaenklarmeningomdet forvikansedeting, somvirker,menendnuvigtigere,deting,somikkevirker.ogdeterdetviinteressereti,også nårvierudeogsnakkealmindeligfundraising,såervimereinteresseretihvorforfårfolk afslagistedetforhvorforfårdebevilling fårdeterderinde,derliggermangeguldkorntil hvordanmankangivegoderådvideretilfolk.ogderkanmanheltklartgodtdragenogle parallellermellemtraditionelfundraisingogcrowdfunding. Den(forbundenhed(du(ser(mellem(traditionel(fundraising(og(crowdfunding,(hvordan( kan(det(bruges(til(at(rådgive(virksomheder,(som(mangler(penge?( Mankansige,hvisducrowdfundersåforventermansombackeratfånogetigen.Derer modydelser,atmanblivertagetmediudviklingsfasen,atmanbliverhørt,atmanfårengratis kopi,atmanblivernævnt derermangeting.denmodydelse deneksisterejoogsåi væsentligomfanghosfondeogpuljerosv.deterdefærresteidag,sombaregiverpengefor 100%filantropi.Hvisdeterfondenesåvilmanmåskegernehavenogeteksponeringide projekter,derfårstøtte.manskalihvertfaldvide,hvemsomhargivetstøtte.såderskalvære enellerandenformforassociering.detkanværealtfradehelttraditionellemessingplader, tilatblivenævnt,tilatklippedetrødebåndoverosv.ogsåerdetselvfølgeligogså projekternesindhold.viharmangefondeidanmark bl.a.nogleafdestørsteieuropafor 103

105 anlæg,somstøtteropførelserafnyekulturcentreogaltmuligtandet,innovativtbyggeri.og deterklartatdetænker viharheltklartenmeningomhvordandetherbyggeriskalseud her Asådererfondenefaktiskgåethenogblevetmereensparringspartnermereenddeeren donor ogdeterjodetsomogsåskericrowdfunding dererbackernehellerikkebloten donor,menogsåensparingspartner fordifolkkanfåderescrowdtilatudvikleprodukterne idenrigtigeretning,hvilketersuperinteressant.såmankansigeerencrowdfunding kampagnemislykketfordidenikkeopnårfundingdenskal? næppe,derkanlæggerigtig mangegodetinggemtidialogenmedditcrowd,somdukanbrugefremadrettet detkan væreduhartrykketpådenforkerte knap ogharigangsatnogetsomderbareikkevar købekraftellerinteressefor.determegetinteressantatmankanbrugedetsom kvalitetssikringpådenmåde.ogsåtrorjegdenandenparalleler,atduskalvidehvaddu laver folkharnemligdenoverbevisningatdeterbareligefirefotografierogsåligeenvideo viskyderefterfyraftenogsåerdetdet.folkharofteikkeenideomdetarbejde,somskaltil foratfundraiseellercrowdfunde.ivoresverdenderhængerdetogsåsammemedatfolkbare brugercopyapaste joflerevismiderudtiljostørresandsynlighederderforatkommeret ellerandethjem.intetkanværemereforkert allefondesnakkersammeienellerandet omfang.deharderesegetnetværk hvisduikkeeråbenogærligomhvadoghvorduhar søgthenne såfårduafslag.detsmitterjoafnårdumodtagerenansøgningidenandenende ogkanse,atdeterderikkebrugtmangeminutterpå ogdeterikkeengangadresserettilos. Detkanværedeikkeharskrevetnavnetrigtig ogdeterjofatalt.såmankansige inputer ligmedoutput.såhvismanbrugermeretidpådetfårmanogsåmereudafdet.derfor opleverviogsåatflereogflereforespørgslerindenvirksomhederlaverenmasse.detvilsige atmansætterenmasseskibeisøenforatprøveatfindeudafom erderoverhovedeten interesseomkringdetherprojekt.prøveratbyggetnogetop.detbetyderatindenman måskebrændteenmassekortpåhånden gørmannogetlidtmerehåndgribeligtidetsmå, fårnogleerfaringermeddet,indenmangørdetstore.ogmanprøverogsåatundersøgeom dereretbehovfordether.ogdetbehøvermanikkeencrowdfundingplatformtilførst der ermange,somgernevilgivedigsvarpånogethvisdubarelæggerdetudpådesocialemedier ogandresteder.mankansigeatcrowdfundingogmarketingerfobundet,handleromikkeat sågræsvedatkiggepå.manatmanskalgødejordenmangegange,oghelstiflerefaser.der erutroligmegetrelationshipmarketingigangheleprojektetigennem. 104

106 Når(du(siger(relationship(marketing,(hvordan(vil(du(så(vurdere(hvordan(man(bedst( kickstarter(sit(community?( Deteringentvivlomatdublotterdigselvsomvirksomhed,somperson altsåsomindivid ogsåsandeligogsårentidemæssigt.mangegangeerderikkenogetsompatenterog varebeskyttelseellerandetlovmæssigt.ofteerdetjobareenide,somkangåhenogblivetil noget.sådeterogsåetspændendeforumatkommeindi,hvismanselvvilbenchmarke.altså derermange,somserdetsomenbenchmarkingplatformiforholdtilatudvikleegneideerog produkter.herharduligepludseligenportalhvordukanudvikleegnekompetencervedat hoppepåetandetprojekt. (Løssnak ogtelefonsomringer) Nårdetnuersådanetcommunitymanskalprøveat aktivere påenellerandenmådesåer mannødttilatværerigtiggodtilatgøredet ogsåhjælpedetofteikkesåmegetblotatgive demetgratisprodukt.manblivernødttilattageandretiltagibrugogtænkemerekreativt. Måskeskalmansomvirksomhedlavesådanenaktivslagstyrkeefterkampagnen.Mangeaf demsomsidderpåcrowdfundingplatformeskriversikkertreviewselleragererpåandre platforme.kanmanfådepersoneraktiveretyderligereiforholdtilproduktetsådanatdekan skabeinteresseogefterspørgselpåandreniveauer.forellerserdetjoofteforbeholdtdem somsidderpådencrowdfundingplatform deterdeenestesomhøreromdet.detkommer ikkeudiandreled.medmindreduharandrebackerstilatgøredet.detersværtatkomme medenspecifikløsning,menmåskemankunnegøredetsådanatistedetforatfåenreward matchendemeddetbeløbenbackergiver,såkunnemanrewardedemihenholdtildenhype dekreereromkringproduktet. Hvilke(muligheder(ser(du(i(forhold(til(at(bruge(crowdfunding(til(marketingsaktiviteter?( ( Deterklartatdeteretspændendemedieatbenytteforvirksomheder,fordimannetopkan samlepengemensmansamtidigudviklerensprodukt.samtidigerdetjoengyldenmulighed forvirksomhedernetilatpromoveresinideogforhåbentligfåenmassemenneskertilatdele, snakke,oghypeideen.manskaldogværerigtigpåpasseligmedatbrugecrowdfundinghvis 105

107 manikkevedhvordanmanvilgribedethelean.detkanpådenenesideværeenvirkeligstor succes,hvorvirksomhedenfårenmasseinputogfårenmassebackers,somsamtidigdeler dereserfaringermedandre,ogidetheletagetdelervirksomhedensideer.menjegtrorogså detkanfåfatalekonsekvenser.altsåhvisenvirksomhedvælgeratbenyttecrowdfundingmed deteneformålatfåsolgtenmasse,såkandetnemtblivesetsomgrådighed ogsåsandelig ogsåsomdecideretnaivitet.manskalhuskepåatdesucceshistoriersomfindeseropståetpå baggrundafentenetfantastiskspændendeprodukt,etneedatoahaveprodukt,ellernetop fordipersonernebagideenharværetenormtomhyggeligemedatlavekampagnenbådefør underogefter.enafdestørstefejlvioplevereratnårenkampagnemislykkes,såerdetbl.a. fordiproduktetharværetmisvisende,detvilsigeatdenværdisombliverfortaltproduktet skalgiveforbrugerenerdårligkommunikeret.mendeterlangthenadvejenogsåfordi virksomhedenikkeformålataktivereogkommunikeremeddefolksomstillerspørgsmål ellerpåandenmådegiverderesbesyvvedrørendekampagnen.detersimpelthen altafgørendeatvirksomhederneforståromfangetafencrowdfundingkampagne. ( Hvad(så(hvis(man(ikke(når(målet?(Er(hypen(omkring(kampagnen(så(død(eller(hvordan( finder(man(den(næste(gode(bølge(og(ride(på?( Enmissetkampagneerikkejordensundergang hvisblotdererlidthypeogfåbackers,så skalmansedetsometskulderklap.manfårjoenindikationomatinteressenfornetopdit produkterderude.duharbevistatderereninteresse.duharbevistatdukanskabenoget. Detbetydersåatdunuharmulighedforatgåandreveje oggernedineegnevejeudenom crowdfundingplatformene.hererdetnetopatdemåske1000backerskankommeindover oghjælpemedatpromoveredit måske produkt.virksomhedernekanjoforsøgeatlaveet communityoggivetilkendegivelsertildebackerssomstøttedekampagnen.detmanogsåkan eratallieresigmedfolkicommunity et hentefolkind inviteredemombordogpåden mådeforsøgeatgøredemtilambassadørerfordig.deterjolangthenadvejenanbefalinger fraandreendvirksomhedensomskabeensuccesfuldvirksomhed.folkerjomeretilbøjelige tilatkøbeetprodukt,hvisenvenelleretfamiliemedlemharkøbtdetellerhvisenvenafen venharkøbtdet. Hvordan(ser(du(crowdfunding(som(en( customer(engagement (channel?( 106

108 ( Somjegserdetkancrowdfundingværedenultimativemådeatskabeengagementmedsine kunderdamansomvirksomhedharmulighedforatgivehåndgribeligefrynsegodertilsine kundersomtak.manskalbaresomvirksomhedværemegetbevidstomhvordanmangørdet, hvorformangørdetogommankangøredetsådetgivermening.manskalogsåværeistand tilatleveoptildekravsomforbrugernestiller ogsomjegserdetskalvirksomhederneikke sesigblindpåhvaddevildevilcrowdfunde.deternokmestværdifuldtatbenyttesigaf crowdfundinghvisdethandleromatudvikleetprodukttilmarkedet,ogikkesåmegetnårdet blothandleromatfåpengeikassen. Ser(du(nogle(fare(ved(forbundet(med(at(etablerede(virksomheder(benytter( crowdfunding?( ( Ja,hvismanerenstorvirksomhedmedmasserafpengeogenstorkundebase,såkan crowdfundingletlignegrådighed.detkanletkommetilatseudsomomatmanblotbenytter sigafcrowdfundingfordimankan,ogikkefordimaner nødt tildet.dererenstorforskeli det,somjegserdet.crowdfundingermegetanvendeligforsmåstartaupssomikkeharså mangeandremuligheder,menforstorevirksomheder,kandetgodtvirkeunødvendigt da deligesågodtkanladeværeogbrugedereskunderpåenandenmåde. Kan(du(uddybe(det?( ( Dereruendeligmangemulighederhvorpådukanfåengageredekunder.Somjegnævntekan mangennemsitsocialenetværkjobarespørgeomforbrugernesmeninger,lavekonkurrencer ellerlaveworkshopsetc.jegvedikkesåmegetomdet,menjegkanforestillemig,at virksomhedernekandragefordelafandremetoderendcrowdfunding.mendeterenanden snaksomjegikkekantage. Debriefing:( ( Takfortiden,ogdeinputsomhangav.Enlillesamtaleomløstogfast. 107

109 Appendix)IV)^)Interview)With)John)Vaskis)(2014)) How(do(you(see(crowdfunding(as(a(marketing(tool(and(as(a(customer(engagement( channel?( JV:Crowdfundingisavaluabletoolforentrepreneurstocreateawarenessabouttheirnew ventureorproduct.acrowdfundingcampaignenableseverybodywithagoodideatoshare informationdirectlytoexistingandpotentialnewcustomersandifit sappliedcorrectly, crowdfundingenablesindividualstocreatestrongcommunities,whichcontainskey individualswhocanassociatethemselvestotheproduct.theseindividualsplayavitalrole throughoutthecampaigncausingthemtogoviral,becausethey share theirpledgesand/or donationswiththeirnetworks. How(do(you(see(crowdfunding(as(a(way(to(build(online(communities,(relationships(and( brand(advocates?( ( JV:AsIseeitthefirststepinsustainablemarketingisyourcommunity.Identifythemost influentialmembersanddeveloparelationshipwiththem.indoingso,you llmaximizeyour reachwithoutanyadditionaleffort.youcouldalsocompilealistofpopularbloggersinyour industryandcontactthemdirectly.ifyoucanhaveotherpeoplewritingaboutyourprojectin anobjectiveaoutsiderstyle,yourcompanybecomesmorecredible.bypublishingmultimedia pressreleasesincorporateavarietyofdifferentelementstocaptivateyourcustomers.it s aboutinformingyourcustomersaboutanybigchangesorupcomingevents.bybeingtrueto yourcustomersyou llestablishalongalastingidentitywithyourfollowers,andifyouinvolve yourreaderseverystepoftheway,they llneverfeeloverwhelmedbyyourfrequentupdates. Mapoutastrategyandsticktoit,buttrytonotbeoverlyaggressiveinyourapproach. Consistencyandqualityarethemostimportantwhenitcomestobuildinggenuine relationshipsonline.crowdfundinggivescompaniesshortcutstobuildingatleasttwoofthe threeelementsofbrandequitynamelybrandawarenessandbrandloyalty.itdoesn t necessarilydetractfromthethird,brandassociation.iseethewholeideaofpledgingasaway tostate Ihelpedmakethishappen.WorkingatIndieGoGoIseesmallbusinesseslaunching newideasandproductsonourplatformbutalmost50%ofthemdon tknowhowtouseour platformcorrectly.asiseeit,socialmediaisapowerfultool,butrarelyproperlyusedby 108

110 entrepreneurstobuild,excite,andengagetheircrowds.iwouldsaytheproblemisnotthe technologyavailable,butrathertheinternalcultureoftheorganization.+building+ relationshipswithyourbackersissomethingyoushouldalwayshaveinmind,andi witnessingentrepreneursmakingthemistakeofsimplythinkthatwhentheylauncha campaignthat sit.tomethefundingpartisnotthemostimportant.youhavetopreparethe campaignbeforehandsothatthebackerswillnotonlyfundyourprojectbutalsomost importantlybecomeengagedcommunitymembersduringthecampaign.backerswillalso playanimportantpartafteryourcampaignbecauseyounowhavethemarketresearch,data, andamarketforyourproduct.+ + Do(you(see(any(challenges(for(companies(using(crowdfunding(to(engage(with(their( customers?( ( Tomebrandsarefocusingoncollectingsocialmediafansinsteadofactuallyconnectingwith them.companiesareusedtofocusonthe4p soreventhe7p s.inmyopinion,companies needtofocusonthe3e s:engage,equip,andempower.engage Giveyourfansthegiftof you.engagewiththem.listentowhattheyaretellingyou.youhavetobepartofthe conversationaboutyourbrand,andbeapresenceinyourfans lives.equip givethema reasontotalk.itcanbetellingaboutbeamazingproducts,greatservice,insiderknowledge, socialelevation,incrediblestories,unbelievablefactsorevenfunnydisclosures.it sonyou.it reallydependsonyouunderstandingyourconsumersandwhattheylikeaboutyouand providingwhateveritistheyneedfromyou.empower giveconsumersdifferentwaysto talkandshare.letthemknowthattheyareimportanttoyouandthatsharingtheiropinions isimportanttoyou.helpthemfindwaystosharewiththeircirclesandfindwaystohelp themmovetheirconversationsaround ) 109

111 Appendix)V)^)Mikkeller s)expansion)time^line) 2010:MikkellerBaropensonVesterbro,Copenhagen 2012:LaunchesMikkellerSpirits 2012:Launchestheannuallyreturningbeerfestival,CopenhagenBeerCelebration 2013:OpensMikkeller&FriendsonNørrebro,Copenhagen 2013:OpensaMikkellerbarinSanFransisco,California,USA 2014:OpensaMikkellerBarinBangkok,Thailand 2014:OpensaMikkellerBarinStockholm,Sweden 2015:OpensaBrewpubinthemeatpackingdistrictonVesterbro,Copenhagen ) 110