These days, crowdfunding projects are a dime a dozen.  And the sites that power these projects seem countless. The concept is simple enough, and with a range of pledge donations from $100 to $10,000, anyone can become a venture capitalist.  The approach has been highly successful for some, like Pebble. But then, some projects have tanked. Worse still, some projects aren’t even real.

News surfaced this week that Kickstarter project Soap, a home automation router, is being accused of scamming backers. Word came from Reddit user Saironek, who laid out his evidence against Soap and its creators.  Saironek stated that the creators didn’t look like real hardware or software developers; Soap’s social media accounts have more followers than backers on Kickstarter, with a significant number of those being fake accounts; and that the money Soap is asking for isn’t enough to make the product.

Saironek may have raised valid concerns, but he also may have a hidden agenda. Saironek is creating something similar to Soap, and is now being questioned as merely discrediting the competitor. According to Soap’s Brandon Jones, Saironek’s real identity is Jan Cermak from the Czech Republic, and has been harassing Sage Technologies, one of Soap’s suppliers, to give evidence as to whether or not Soap is a legitimate product.

Though Soap’s people have spoken about the incident, some still doubt the credibility of the project.  Which raises the larger question, how reliable are crowdfunding projects?

A few weeks back, SiliconANGLE Founding Editor Mark ‘Rizzn’ Hopkins posted a rant on Facebook on the matter, stating that he has invested over $550 on projects in the past three years, but received none of the projects.

“At what point do we start blaming Kickstarter for supporting what amounts to fraud?” questions Hopkins.  “Hundreds of thousands (millions?) of dollars have been collected as pre-orders for a variety of projects that were never delivered.”

Sadly, there have been other incidents of projects being launched on crowdfunding sites that left backers hanging.

3 crowdfunded projects that left backers hanging

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LUCI

GXP Technologies launched LUCI on Kickstarter.  LUCI is described as a device that induces lucid dreaming, or being aware that you are dreaming, and them making things happen as you wish.

Of course a lot of people wanted to take control of their dreams, so the project raised a total of $363,302 CAD in pledges from 2,569 backers.  After reaching its target the project was abruptly cancelled, stating that the creators of the project chose a real investor to back them up instead, but still promised that the device would launch in February 2014.  The last update on LUCI’s page was made in November 2013, and we are now in March 2014, still no LUCI.

Kobe Red

Kobe Red’s Kickstarter promo

This project is centered on 100 percent Japanese Kobe Beef Jerky that is made from beer-fed cattle.  The Kobe Red is said to be wet-aged and infused with sweet and savory gourmet flavors.  Looking at the photo and reading the description can make any jerky fan salivate and hit that pledge button.  Unfortunately, it’s all a scam.

The creator of the project, Magnus Fun Inc., was involved in other defunct projects and those who allegedly got to try the said jerky, were the same people who funded Magnus’ other projects.  Basically, they got people to pose as backers to prove their credibility as well as to entice other people to back their project.

Everything would have gone smoothly for Magnus if Documentarians behind the film “Kickstarted” didn’t press them for further information about the jerky, their identity, and the disparity between the cost of production and the amount they were requesting for the project.  Magnus stated that they would provide video documentation but that never happened.  Kickstarter was tipped off, and just before Magnus was scheduled to receive the pledge funds, the project was pulled.  Magnus Fun disappeared from Kickstarter, along with the identity of the people behind the fictitious company.

Katalyka

In 2011, Molly Friedman launched a project on Kickstarter for a board game called Katalyka.  It was quite intriguing, as the game promised to be cross between Risk and Magic the Gathering.  The mock-up looked great, the art on the cards were appealing, and the product looked legit.  The project received $7,840 in pledges from 85 backers, who couldn’t wait to get their hands on the game.

Friedman was posting updates frequently after receiving the funds, and promised the game will be ready by December 2011.  That didn’t happen, so the backers started worrying.  Friedman then posted updates stating that she was having problems with printing, the paper, getting overwhelmed with the project, and the sun has been verbally harassing her.

The last part is enough to tell you that this whole project has gone down the drain.  But Friedman tried to appease her backers by still posting updates on Kickstarter, the latest in January, stating that she moved and she just needs her stuff from Seattle to start shipping the game to backers. Oh, and she even provided a link for the print and play version of the game for those who can’t wait for the real product.

Scam Backers

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Projects aren’t the only ones scamming people.  Even backers have duped project creators.  Kickstarter user Encik Farhan is known as a Scam Backer.  His modus operandi was to donate a large amount of money on a project, enough to get the attention of the project creator, then wait for the project to arrive.  Seems harmless enough?  Not entirely.  After receiving the product, he disputes the charges with Amazon, the entity that handles Kickstarter’s payments, and gets his money back.  To put it bluntly, Farhan was getting stuff for free. He may have helped projects to get to where they are but getting refunded for something he already received is just unscrupulous.

Have these tales turned you off from backing crowdfunding projects?  I wouldn’t blame you if you turn your back from such projects, but you have to remember, not all projects and project creators are scams, and there have been many projects that successfully launched.

So how do you detect the bad apples from the good ones?

photo: Scott Beale via photopin cc