With crowdfunding, odd often competes with fraud

Commentary: Crowdfunding sites like Kickstarter and Indiegogo have been credited with launching a sort of innovation renaissance in recent years. Small businesses, entrepreneurs and artists have flocked to the sites to get the seed capital they need to build their dream projects. And there have been some stunning successes.

The Pebble, for example, is one of the first popular smartwatches, and it's likely that it could only have happened thanks to its $10 million funding (against an original goal of $100,000).

Meanwhile, there's going to be a Veronica Mars film thanks to people contributing $5.7 million. And the future is probably going to have a lot of virtual reality in it thanks to Oculus Rift, which exited Kickstarter with $2.4 million, 10 times its goal. Since the close of its campaign, the company was gobbled up by Facebook for $2 billion, and the product's development looks so promising that a number of other companies have entered the VR headset space as well.

But for every crowdfunding success story, there are a dozen dubious tales. Certainly, not all campaigns hit their goals, while many end up shipping much later than planned. And many projects exhaust their budget and never ship at all despite taking backer money. Some of these are scams from the outset, or are simply baffling.

For evidence, look no further than the hot news out of Kickstarter last week. Someone named Zack Brown wanted to make some potato salad. And for some reason, his clearly tongue-in-cheek proposal blew up the Internet. With an original goal of $10, Zack Brown now has $48,000 with which to "try two different Potato Salad recipes."

Zack's campaign is on track, which is more than one can say for some other Kickstarters. In 2013, for example, a group in the U.K. decided to Kickstart a Death Star, with a funding goal of about $40 million. Sadly, they didn't hit their goal. Imagination Station Detroit had better luck, though, with its $50,000 Robocop statue -- it earned $67,000 and is currently being assembled with plans to erect it in the city of Detroit later this year.

While Kickstarter has had its share of unusual and superficial campaigns, Indiegogo has found itself mired in a number of controversies over its inaction in the face of seemingly fraudulent projects.

Earlier this year, for example, scientists and skeptics set their sights on the Healbe GoBe, an activity tracker health wristband that, among other things, claimed the ability to track how many calories the wearer consumed by non-invasively measuring glucose levels through the skin. The consensus: Pure science fiction. Even after the company pitching GoBe was shown to have made verifiably false statements, Indiegogo took no action to halt the campaign, and the project closed with a million dollars, 10 times its goal.

And that wasn't Indiegogo's first brush with pseudoscientific campaigns, either. In 2013, almost 300 funders kicked in $18,000 (over twice the goal) for a "Home Quantum Energy Generator," which promised to create completely free energy -- an obvious scam that many argue should have been shut down before its creator walked away with the cash.

So while almost 6,000 people appear to be in on the joke with Zack Brown, and appear more than happy to give him nearly tens of thousands of dollars to whip up a salad, it's not always so clear cut. Kickstarter and Indiegogo might be powerful engines of innovation, but use common sense and good judgment before backing anything at one of these sites.

Photo courtesy of Kickstarter