The Kreyos smartwatch is perhaps the most impressive Indiegogo failure to date. This campaign for a waterproof, voice- and gesture-controlled smartwatch with 7-day battery life, raised more than $1.5 million in August 2013, only to crash and burn a year later. Kreyos’ CEO insists that the project was not a scam, but rather a concept from a team with no smartwatch expertise that ran into manufacturing problems. While some of Kreyos’ backers have received their smartwatches, these watches have proved to be not at all what the campaign claimed (they’re not waterproof, they don’t have epic battery life, and many of the features are useless).
Should you participate in crowd-funding campaigns?
One of the great things about crowd funding is that it can remove one of the biggest obstacles to innovation: Convincing a few people who control great gobs of capital that a new product is worth making. Sometimes the wisdom of the crowd is smarter than the most successful venture capitalist.
But there will be plenty of times when it's not. Our advice: Approach a crowd-funding campaign the same way you would any other investment. Do your due diligence, and if you're convinced that it's a great idea, contribute only as much as you can afford to lose.
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