How to Trust Crowdfunding in the Midst of Scams and Controversy?

If you’ve been following events in the crowdfunding or online tech startup worlds at all, you might have heard of the controversy surrounding Healbe GoBe, an over $1m Indiegogo campaign to fund a device that medical science says can’t possibly work. A startup-focused news site called PandoDaily has been leading the charge on the investigation into Healbe’s possibly fraudulent campaign, and it hasn’t looked good on Indiegogo at all.

A little under a fortnight after the first article ran, Indiegogo responded by modifying the anti-fraud guarantee on its website so that the wording was less absolute. A day later, Pando reported on another Indiegogo campaign which had been funded less than six months earlier, also appears to be medically impossible if it can do everything it claims, and for which the company responsible for the device, TellSpec, has since completely reset the clock on the development of a product they originally claimed to have nearly perfected. A parody of the Healbe GoBe campaign was created called ‘Miracle Health Bracelet: Vaguely Track Your Health, Fitness and More’ which made it past Indiegogo’s supposed anti-fraud algorithm, though it has since been removed. Finally, to cap everything off, Pando reported yesterday that the undisclosed donation which pushed Healbe’s calorie counter over the brink of $1 million came from none other than Indiegogo’s chief of hardware, Kate Drane. Clearly, Indiegogo is determined to throw its full weight behind this campaign in spite of all the negative press, scientific debunking and waves of requests for backer refunds.

There have been arguments made on both sides, some saying that Indiegogo needs to take responsibility for the campaigns promoted on its platform and others saying that it can’t be held liable for what the crowd decides to put its money behind. Either way, the Healbe controversy is bound to have a knock-on effect on Indiegogo’s credibility and the willingness of consumers to back other products on its site. After all, there are plenty of other crowdfunding sites out there with innovative projects, products and ventures. But how can you be sure that they won’t have the same problem?

The Evolution of Crowdthings

“Crowdsourcing is the process by which the power of the many can be leveraged to accomplish feats that were once the province of a specialised few.” – Jeff Howe

On the Internet today, we see an awful lot of things with the word “crowd” in front of them. It makes sense – after all, the Internet is about bringing vast amounts of people together from all around the world to make new things possible. The most exciting thing about being online is seeing what innovative results can come from combining those people with the wonders of technology and a few ingenious ideas.

The word crowdsourcing itself is very much a product of the Internet age, as it was coined by Jeff Howe in a 2006 Wired magazine article, ‘The Rise of Crowdsourcing’, and later given a more refined definition in his blog. You could argue that each of the terms I discuss in this blog post is just a variant form of crowdsourcing, but I think they warrant being considered separately, because by and large they’ve evolved beyond the point where they fit Howe’s definition at the top there, and instead have taken on a life and characteristics of their own.