Best laid plans of mobs and men: The 5 biggest crowdfunding failures of all time
In a perfect world, all crowdfunding projects would live up to their promises and deliver on time — but unfortunately we don’t live in a perfect world.
Crowdfunding sites can’t promise that the projects funded on their platforms will definitely come to fruition — it’s up to backers to look out for warning signs that a project isn’t exactly what it seems. On more than one occasion, budding endeavors on Kickstarter and Indiegogo haven’t been able to live up to their promises, often leaving backers with a feeling of disappointment (and an empty wallet).
These are some of the most notorious.
At first, iBackPack seemed like the perfect Indiegogo investment. It had diagrams, happy videos with lots of millennials, and an interesting concept: An urban backpack that could store, charge and help provide hotspots for iPhones on the go, with plenty of room to spare. It was also vastly successful, raising more than $720,000 in 2015 alone, plus more from Kickstarter.
Then iBackPack vanished. YouTube videos were taken down. Communication ceased almost entirely, and updates stopped completely with no word on if the backpacks would ever exist. It’s now almost certain that the iBackPack will never exist. The company behind the project claims that the backpack ran into problems because of issues in finding safe charger batteries, but some investors have noted that the batteries they were intending to use don’t appear to have had any specific problems. Currently, it looks like this startup won’t start, and a lot of unhappy people will be left behind.
Central Standard Timing raised more than $1 million in pledges from 7,658 backers on Kickstarter, for what it deemed “the world’s thinnest watch.” The CST-01 was funded in 2013, and boy, has it been a journey since then. Delay after delay plagued the e-ink watch as the company struggled to find the sort of technology it needed to actually create the watch.
There’s been a lot of silence from Central Standard Timing, but in 2015, the company posted an apology — and an update — for where the watch stood. It wasn’t good. Central Standard Timing had parted ways with the manufacturer it had been working with for the majority of the process. After another year of silence, Business Insider reported that the company had filed for bankruptcy, making it even more unlikely that CST-01 backers would ever see the money they’d given the company.
It’s likely that Central Standard Timing didn’t intend to scam its backers out of money; it sounds like the company was in over its head in regards to the manufacturing of the watch. However, that certainly doesn’t excuse the money lost by Kickstarter backers.
Elio Motors Scooter
Elio Motors launched a crowdfunding campaign promoting a new 3-wheeled electric vehicle that was supposed to hit the markets in 2014 with incredible fuel efficiency. The company was certainly good at one thing: Raising money from casual investors, to the tune of $17 million for its first crowdfunding round, including over 65,000 that reserved a model ahead of time. Elio even hit the road with a conference on how to properly raise money via crowdfunding.
Then … well, nothing happened. Elio Motors burned through its investment money in only a few short months, primarily on suspicious soft expenses easily summed up as “paychecks.” The supposed released date has been pushed back for years, Elio has failed to get any additional loans for production, and it is now obvious there will never be an Elio scooter. The company is currently selling its small amount of manufacturing equipment just to keep the lights on, and is expected to collapse entirely any time now.
Skarp Laser Razor
The Skarp Laser Razor was supposedly going to revolutionize shaving by using a laser to remove hair. Apparently, human hair contains a chromophore (a particle that can absorb certain wavelengths of light) that allows follicles to be cut when hit with a particular wavelength of light.
The company behind the razor, Skarp Technologies, claimed to have a working prototype. However, the video on the project’s page didn’t exactly garner confidence from skeptics. Sure — Skarp’s technology might able to snip off a few hairs, but it wouldn’t be anywhere near as effective as a regular ol’ razor.
Kickstarter eventually stepped in after more than 20,000 backers raised more than $4 million in funding. An email sent to backers soon reported that the company did not actually have a working prototype, and the company was in violation of a rule that requires working prototypes of physical products that are offered as rewards.
Shortly thereafter, the project quickly moved itself over to IndieGoGo, where it raised close to $500,000. Skarp is still coming out with periodic updates about…uh, lavish, empty meeting rooms and more pseudo-science about fine-tuning their fibers.
One of the most infamous crowdfunding cancer stories comes from Alabama, where Jennifer Flynn Cataldo, 37, set up GoFundMe campaigns to help pay for medical bills associated with her cancer. She got donations of more than $38,000, before being quickly convicted of fraud. Her assets are now being seized to pay back donors.
While this story had a happy ending, cancer scams are incredibly common. In fact, it’s a good policy to never trust a crowdfunding campaign for any kind of medical bills or any personal problems whatsoever. It’s far too difficult to verify these costs, and much too easy to get distracted by the emotional stories.
ZANO Autonomous Drone
Torquing Group Ltd. raised more than $3 million in pledges from 12,075 backers on Kickstarter for this palm-sized and much-hyped drone. The ZANO, as it was called, was supposed to connect to iOS and Android smartphones to capture and instantly share photos and videos. Everything seemed to be going smoothly, but then the delays started piling up. Eventually, Torquing Group filed for bankruptcy — at which point Kickstarter hired investigative journalist Mark Harris to find out why the project had failed.
Apparently, Torquing tried really hard to make the drone, but just didn’t have the resources to see it through to completion. The drones were “barely operational,” according to Harris, which was bad news for everyone, but mostly for backers who coughed up hard-earned cash that they’ll never get back.
Congressional Internet History
Here’s an odd one: Search Internet History was created on GoFundMe in 2017 to buy the browsing data of U.S. congresspeople. Not just casual data, but all their searches, and all the internet activity of their families, too. Despite being quite illegal and almost entirely impossible, the campaign fed the fires of ire and politics, managing to raise $190,000. Eventually, people who actually knew how the internet worked stepped in and said, “This actually can’t happen, legally or technically.” Politics and independent fundraising appears once again to be a poor mix.
Triton — the creators of a device that supposedly would allow users to breathe underwater — have admitted to misleading its backers, and have re-funded nearly $900,000 to Indiegogo backers. The company initially suggested its device was able to “extract breathable air” from water, but that wasn’t entirely true. When the internet (and Digital Trends in particular) started questioning the science behind the product, Triton had to come clean.
Triton Gills actually used what Triton calls “liquid oxygen” cylinders to allow swimmers to breathe underwater. These aren’t currently reusable, and don’t last forever. Those who purchased the Triton Gills will have to buy cylinders to keep using the device. The company remains confident that it can deliver on its new promises, but many backers aren’t convinced.
FND Films was a three-man comedy group from Chicago and very popular in their own way, at least until 2014, when they announced an Indiegogo campaign to make their own movie. Fans reacted quickly and the group managed to raise more than $75,000 from 603 very invested people. The result was a big solid nothing for more than 3 years. Well, nothing on the film front, at least. The group did post Instagram shots of them on vacation in Europe and Mexico, which raised a lot of eyebrows.
However, this story has an even more annoying ending: FND was trolling its fans the whole time. The movie they did announced in 2017 was called “It’s All Good” and is about indie filmakers who raise around $75,000 with crowdsourcing and blow it on partying. Apparently, the previous scandal was some sort of marketing campaign for the idea…which has got to make those angry fans feel a whole lot better, right?
A Kickstarter campaign for beef jerky, made from organic, beer-fed Japanese cows could have taken lots of money from eager jerky fans. Luckily, however, Kickstarter shut down the campaign on the day it was set to end — even though the project made far more than its original goal of $2,374. Kobe Red garnered a cool $120,309 in pledge money from more than 3,000 backers.
The company behind the project, Magnus Fun, intended to offer three flavors, including brown sugar with lemongrass, sweet spicy ginger teriyaki, and smoked honey with spiced curry. Everything seemed to be going well until backers grew suspect of the company; after all, the Kickstarter page had almost no information regarding the organization. Documentary filmmakers soon began investigating the company and its product, only to find a bunch of sketchy information when they took a peek behind the scenes. Luckily, Kickstarter stepped in before any backer payments had been processed.