Digital Trends | By Luke Dormehl | Feb 5, 2017

Crowdfunding has a failure problem.  Over the past couple years, platforms like Kickstarter and Indiegogo have been host to quite a few high-profile flops. Just last month, the once-super promising Lily camera drone project crashed back to earth. Having collected $34 million in pre-orders from a massive 60,000 customers, it closed shop before entering production.

Before that, there was the Coolest Cooler debacle: an ongoing) predicament in which the most successful Kickstarter project of all time (over $13 million in pledges) failed to deliver to thousands of its backers.

Before that, it was the Zano Drone: a failed UAV project that left over 14,000 orders unfulfilled. The list goes on and on.

Thing is, these aren’t isolated incidents — they’re just the most widely-publicized ones. Spend just a few minutes Googling your chosen category of crowdfunding project (video game, desk toy, drinks cooler, UAV) and you’ll find hear about so many crowdfunding disasters that you’ll want to get memories of Kickstarter and its ilk surgically removed from your brain.

In some of these crowdfunding horror shows, refunds are thankfully given out. In others, creators are never heard from again, and the idea that you’ll get your hard-earned money back is as likely as a friendly resolution to an argument in a YouTube comments section.

Unpacking all of this isn’t easy. Most crowdfunding entrepreneurs we speak with harbor the fear that nobody is going to pay any attention to their campaign; worrying about what will happen if people pay it too much attention is like seeking an advance restraining order against Mila Kunis on the off chance that she might one day start stalking you.

See:  Move over Kickstarter, equity crowdfunding lets you get a piece of the action, not just a lousy T-shirt

From a subscriber perspective, it’s no less complex. Part of what we love about crowdfunding is the DIY ethos behind it. If a company is too established, if it’s a millionaire movie star raising money for a project they could pay for themselves, people understandably bristle. Crowdfunding feeds into the “couple of guys (or gals) building something in a garage” dream that Silicon Valley is built on. You’re along for the ride. Delays are commonplace and, so long as they’re not indefinite and backers are kept informed of progress, most don’t get too upset.

After all what’s the alternative: turning crowdfunding into platforms geared only at the pros, rather than the kind of democratized market place it was envisioned as?

So what’s the answer?

As crowdfunding continues to develop, these are questions that need to be addressed, not willfully ignored. This is a conundrum Indiegogo is trying to help solve. As the one of the top two crowdfunding sites (alongside Kickstarter) Indiegogo has hosted more than 700,000 campaigns over its 8.5 years of life — and helped raise over $1 billion in pledges along the way.

However, with more and more stories of failure among crowdfunding entrepreneurs, Indiegogo is trying to change its service to resolve some of the frequent problem users and entrepreneurs face.

For Indiegogo CEO David Mandelbrot, the campaign which alerted him to the problem was a 2015 project on the platform called Axent Wear Cat Ear Headphones.

“It was created by two design students at UC Berkeley who had the original goal of raising around $250,000, and raised over $3 million on Indiegogo,” Mandelbrot told Digital Trends. “But they were design students: they’d never done manufacturing of a consumer product at scale. Their story was the inspiration for our lifecycle strategy.”

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