Polarized Distinctiveness: How Platform Designs and Superstar Connections Shape Crowdfunding Success

Abstract

Crowdfunding platforms often see a few top campaigns succeed while most struggle. Optimal distinctiveness theory (ODT) suggests campaigns need to balance fitting in and standing out, but platform designs can interfere with this balance. This study examines how Indiegogo's “keep-what-you-raise” model changes optimal distinctiveness levels. We find a U-shaped relationship between distinctiveness and crowdfunding success. In contrast to the “all-or-nothing” model that favors moderate distinctiveness, the “keep-what-you-raise” model demands that campaigns either closely conform or be exceptionally distinct to succeed. Collaborations with superstars steepen this U-shape, amplifying penalties for moderate distinctiveness while boosting gains for extremes through knowledge transfer and legitimacy spillovers. We extend ODT theoretically to demonstrate how platform dynamics disrupt conventional balancing acts by incentivizing strategic extremism. Methodologically, we advance the distinctiveness measurement through a contextualized heterogeneous graph neural network. Practically, our findings guide campaigners to adopt platform-specific distinctiveness strategies and advise platforms to design mechanisms that support niches.