Sometimes crowdfunding is an amazing financial tool. It leads to new ideas, easier ways of doing things, and gives people access to funding for their dream projects. It can also have a negative side, like when projects don’t deliver or are outright frauds (a risk of which not all backers are aware).
Indiegogo allows just about any project on the platform (unlike Kickstarter); some have criticized them for leaving up fake-looking campaigns. Currently Indiegogo is testing a new insurance option for backers to help them feel more secure supporting projects on the platform.
This features is being tested on one campaign so far – Olive, a stress management device that has raised over $177K. For an additional $15, backers can buy product insurance and if they don’t receive their reward within 3 months after the expected date, they can claim it and get a refund.
This change is coming about a month after the company asked visitors of its site to complete a brief survey on trustworthiness. Clearly with a number of successful campaigns that didn’t come through this year Indiegogo is trying to improve their reputation and make things better for people who use the platform.
One example of a project that affected Indiegogo’s reputation this year is HealBe GoBe – a wearable device that was supposed to measure calorie intake automatically. This campaign closed in April 2014 raising over $1M. Their delivery (estimated in June 2014) has been pushed back until 2015 although the device’s feasibility has also been questioned.
Another is the Smarty Ring, which raised over $100K in March 2014 for ring that controls your smartphone. Those rewards had an estimated delivery date of May 2014 and backers of that project have still not received them. One backer, cphillips95 commented:
“I used Kickstarter on a few things and guess what they showed up months later. Indiegogo nothing on 3 different products. How can this web site stay up with this operation? The gogo is what happens to your hard earned money.”
Indiegogo has not provided any further information about their expectations for this test or future plans. In a statement to TechCrunch they said, “Indiegogo regularly develops and tests new features to meet the needs of both funders and campaign owners. This pilot test is currently limited to this individual campaign.” In September 2014 Indiegogo launched a Forever Funding option for campaigns that are successful and want to continue to raise funds. Since then several projects have signed up for Forever Funding, including Gosnell and The Defender.
Whether these changes will set Indiegogo apart from competitors and make up for the lack of moderation on their site is yet to be seen. As CNET noted in a recent article, “The feature, if fully implemented, could see user trust in the platform rise. On the other hand, it could see Indiegogo significantly out of pocket.” Hopefully this turns things around for them but unfortunately many backers who have left the platform unsatisfied may not try again even with these changes.
