Communication of Post-Release Plans in Crowdfunding Development Initiatives: A Signaling Perspective

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