Crowdfunders beware -- your crowd can become an angry mob

By Erin Griffith , written on November 20, 2013

From The News Desk

As crowdfunding increases in popularity, it's being used for more than just the funds. Crowdfunding has become a way to gather attention and customers for new products. There is built-in demand forecasting, and a time-sensitive mechanism for drumming up press coverage. Companies like Romo and Lively have raised capital from venture investors, but they still launched crowdfunding campaigns, not for the funds, but for the crowds.

The problem with the crowd, though, is that it can easily turn into an angry mob.

That happened to Wayne Kendall earlier this month. He launched a Kickstarter campaign to raise funds for a project he'd built with his wife. His product, LUCI, claimed to help people induce lucid dreaming by detecting REM sleep, at which point the headset gives sleepers a vocal alert saying, "This is a dream. Take control." The prototype produced lucid dreams more than half of the time in testing, according to LUCI's product description.

The project quickly gathered steam. LUCI raised $400,000 CAD in pledges from more than 2000 backers. But then a backer noticed that Kendall had enhanced one of his photos of the LUCI prototype, which is against Kickstarter's rules. He contributed $1 to the campaign so he could point it out on the comments page of LUCI's campaign.

Kickstarter has experienced backlashes from projects failing to deliver on their promises. The crowdfunding platform has chosen to take a hands-off stance on fraud and vaporware, leaving users to decide for themselves before backing a project.

The company Kickstarter has intervened before in the case of fraud accusations, but it is rare. The most notable instance is when Kickstarter cancelled the successful Kobe Red jerky campaign after a documentary filmmaker outed the project as fraudulent. According to Jason Cooper, one of the documentarians, this is the way crowdfunding The crowd acts as a “filter on what’s good, bad, legit, fraudulent,” he told Cale Weissman earlier this year.

With suspicious Internet strangers poking holes in a product's validity, it's important for projects to have clear, professional, trustworthy videos and photos. It also means one nay-sayer can derail a project's momentum. Recently Popular Science shut off comments on its Web site, citing studies that show an uncivil comment, or even just a "firmly worded" disagreement in the comments, can sway a reader's opinion of an article.

This is how things got ugly for LUCI. On the message board for the project, a backer named Michael Paul Coder, who has also worked on lucid-dreaming projects, hurled a number of accusations against LUCI and Kendall. Calling the project a "scam" and "a joke," he stated Kendall's initial claim that users will have lucid dreams 80 percent of the time is impossible. Any claims with exact percentages have since been removed from LUCI's project description.

Coder was unable to find information online about Kendall, or GXP Technologies, the company which Kendall created for the development of LUCI. He used that as fuel to discredit Kendall:

They have no website and the person behind it doesn't have a trace of an online presence. His name may just as well be made up in preparation for the outcry when the investors, you, wake up.
As the Internet goes, one angry person can quickly snowball into an angry mob. Some of the project's backers pulled or reduced their pledges. Others demanded Kendall post a second video of himself demo-ing the product. And some backers began to harass Kendall's wife on Facebook with messages like "we know who you are, we know where you live," according to Kendall.

On the Kickstarter comments page, Kendall responded swiftly to Coder's accusations. He then reached out to Kickstarter about the harassment, but got no reply. A Kickstarter rep noted that project creators can flag comments for its moderators if they appear to be breaking the site's community guidelines. Kickstarter receives around five flags a day from creators. There is also an "I see abusive behavior" option for any community member to flag harassment.

Kendall decided to abandon his campaign. He found a private angel investor to back the project instead. On Nov. 11, he cancelled LUCI's crowdfunding campaign. An email went out to backers, stating that LUCI had gotten a loan from a private backer. Kendall wrote:

We still think Kickstarter is a great medium, but it clearly has some serious moderation issues. Giving them $20,000 in commissions for allowing such a circus on their website does not seem appropriate.
He lamented his lesson in Internet backlashes. "It's a shame that what started as a wonderful, interactive Kickstarter project ended this way. But there was no convincing anybody otherwise at that point," Kendall said.

He did it just in time -- Kickstarter has suspended Kendall's account so that Kendall can no longer post comments to the message board. Kickstarter has not elaborated on why the account was suspended but pointed to its community guidelines.

LUCI isn't the only lucid dream project to experience a backlash. Skeptics have also attached Remee, which uses a face mask and blinking lights to induce lucid dreaming. Remee raised $575,891 in its Kickstarter campaign this spring and shipped its product shortly thereafter. Since then, the project's Kickstarter page has accumulated a slew of comments questioning its effectiveness.

Kendall says he intends to release LUCI in the spring of 2014 as planned, crowds be damned.