How to spot a fake crowdfunding campaign
No one likes being a victim of fraud. And, especially, no one likes giving money away for nothing in return. When it comes to crowdfunding campaigns, there’s a bit of blind faith. Sure, platforms such as Kickstarter and Indiegogo do their best to keep campaign creators honest. But, like any industry, crowdfunding has their fair share of fakes.
The beauty of the crowdfunding world is also its biggest downfall; the innovative brands are too new to have credibility. And, a great idea can only be as successful as the business behind it which is something many campaigns lack. While you can explore and discover incredibly new technology and design, you’re also more susceptible to throwing your money away. Here’s a guide on how you can spot fake crowdfunding campaigns to make smarter decisions about your pledges.
Did you know? Pebble Time products take three of the top 5 spots for most funded Kickstarter campaigns. However, Filecoin, a decentralized data storage application, is the highest funded crowdfunding campaign of all time at $257,000,000.
Do you follow crowdfunding trends? There’s so much happening in this industry:
- Crowdfunding allows so many ideas come to life. But, this industry has their fair share of failures. Here are 15 of the worst.
- There are a lot of factors that go into both the success and failure of a campaign. This biggest issue is creators not fully understanding what it takes to bring a product to life.
- People are coming up with ideas on how to make crowdfunding more transparent for backers. One is to rate the risk of deliverability before it even goes live.
If it looks too good to be true…
As the saying goes, clearly fake campaigns will probably showcase technology that couldn’t possibly exist. One infamous campaign was that of Triton, an underwater breathing device. Unlike SCUBA gear, this one promised the use of gills to convert water into oxygen. Through some clever copy, a lot of backers bought into the idea. Obviously, the technology was too good to be true, according to experts. The kicker? They landed over $600k in funding with no product to deliver.
Of course, not all new technology is fake, but the lesson here is to indulge in a healthy amount of skepticism when it comes to innovation. One key indicator, in addition to seeing a working prototype, is to understand what stage the design is. A trend among campaign creators is to use superlatives such as “world’s first.” While great for clicks, it’s a highly overused term. Do a simple Google search to see if the technology exists elsewhere. If so, find out if the project has anything new to offer. Or, if the technology truly is the world’s first, research and determine whether it’s even possible.
If you were disappointed about Triton and are still looking for a way to explore the seas, check out the H20 Ninja. It’s a full-face snorkeling mask that gives you a clear view underwater. It uses tried and tested technology to help you breathe with ease while you explore.
The proof is in the pudding (or patents)
Another project that took the world by storm, at least initially, was Skarp, dubbed the first ever laser razor. Taking home over $500k in pledges, the brand had little to offer backers at the end of their campaign. Their notorious demonstration video all but proved that the razor didn’t work as you’d hope as it barely (and poorly) removed a single strand of hair.
The lesson? Scour campaign pages for proof and demand it if you don’t see it. Don’t be blinded by innovation and instead look beyond what’s presented in front of you. If they have a video, keep an eye on the angles and check for any odd cuts. Dubious campaigns may try to shorten or lengthen time to help prove features of a product. While a video of the product in use is ideal, patents and even trademarks can also give credibility to the creators. It shows that they’re serious and already putting their money where their mouth is.
Still after true innovation for a better shaving experience? The Sphynx is a 3-in-1 portable razor that you can use just about anywhere. It’s compact and offers great grip for those hard to reach areas.Or, for even more innovation, the Aqua Jet is for you. This razor actually hooks up to your shower to offer a continuous flow of water while you shave, eliminating irritation.
Effective communicators
Over on our marketing blog, we help creators achieve better campaigns. One thing that we preach is communication. A campaign creator should have a steady flow of updates for their backers. As a backer, you can follow along on the “Updates” section of both Indiegogo and Kickstarter. Real updates should include more than thank-yous and celebrations of exceeding funding goals. Likewise, their social media pages should be rife with updates on the campaign, production/shipping status, and anything else backers would want to know. Along with the updates, there should be plenty of photo and video evidence.
Jive earbuds seemed very promising. With a robust campaign page and incredible specs, they raised over $20k and had estimated delivery by December 2016. Their last update was May 2017, a year ago. They have no contact details available and their landing page redirects back to their campaign, hardly useful. While we did feature them on Gadget Flow, we’ve since downgraded their rating to a single star.
Looking for earbuds that go the distance? TicPods offer 18 hours of playtime thanks to their included charging case.
Showing their true colors
In addition to progress updates, you can tell fairly easily if the brand behind a campaign is a sham. In 2015, Kickstarter suspended the Kobe Red Beef Jerky project. With a measly goal, dodgy screenshot “reviews,” and no visible people behind the product, it was a total fraud. Luckily, Kickstarter was alerted to all of this in time thanks to potential backers.
Before backing any project, you should head over to the brand’s social media profiles, gauge their public presence, and get an idea of just how transparent they are. Determined creators have a lot of tools at their disposal and understand the need to build credibility. Those that are out for money won’t be putting too much time or money into building a brand. Here are a few things to look out for:
- Campaign Goal: Is the amount too high or too low for this type of product? Compare with other legitimate campaigns.
- Allocation of Funds: A real campaign will have a thorough breakdown of how all of the money from the campaign will be used.
- Public Appearance: Is there an accompanying website? What about social media? Has a third party confirmed the product?
- Transparency: Make sure there are people behind the project. Names should be listed in the campaign profile.
- Credible Reviews: Check if the claims are supported by verifiable sources, whether they’re professionals or known publications.
Wishing Kobe Red was the real deal? Instead, try the Beefer to cook your meat to total perfection right at home.
Is crowdfunding doomed?
Of course not. For every fake campaign, there are dozens of legitimate ones. But, sometimes, fake campaigns do everything they can to convince you that they’re not.
Back in 2015, the iBackPack raised a whopping $720k on Indiegogo for an ultra smart bag (and another $75k over on Kickstarter). Features included Wi-Fi connectivity, batteries, USB ports for everyone around you, and it was even bulletproof. While all of this technology is possible, even in a small device, the iBackPack team took the money and ran. Their website has been wiped and their social media pages haven’t been updated in over a year. But, how did such a dodgy company raise so much? They actually did all the right things; the pitch was solid, they had great campaigns and videos, and even offered timely updates throughout.
The lesson here is that the crowdfunding world is never a guarantee. Even when you are faced with plausible technology, clear communication, and “proof,” it may be a sham. In the event that a campaign is fake, there’s a chance you won’t get your money back. Some have successfully sued dodgy campaign creators, but you can’t rely on this.
Here at Gadget Flow, we rely on our viewers just as much as we rely on our employees. While we thoroughly investigate every campaign we feature, we also highly regard the feedback from our users. As part of our Accountability and Compliance Scheme, we keep listings up to date with ratings so our viewers have as much knowledge as possible before backing a campaign or purchasing a product.
See something awry on Gadget Flow? Contact us!
