Have You Contributed to a Health Scam?

It’s hard to know, Haensly said, “How much of [the faulty projects] are outright fraud, how much is exuberant optimism, and how much is ignorance about how much it takes to take a project through manufacturing. I would like to believe that the majority are put up in good faith, but there’s a high likelihood of hitting a speed bump along the way. Medical devices are even harder.”


Start-ups are notoriously secretive about their inner-workings, and founders who believe they’re sitting on revolutionary technology are even more protective. One complaint by PandoDaily’s Robinson and others is that tech journalists often can’t get their hands on crowd-funded devices until their campaigns have already been fulfilled. That means knowing whether the devices are genuine requires waiting for them to ship to consumers—which also usually means thousands of people have already opened their wallets.

Last month, Christian Brazil Bautista, a writer for Digital Trends, said he saw a live, working demonstration of the GoBe, though he was not allowed to wear the device himself:

Healbe Managing Director George Mikaberydze ingested a can of Mountain Dew, and then observed as the bracelet detected that he had ingested a lot of sugar. When he took it off on our request, we saw his glucose levels fall to zero on a companion iPhone app. He put the bracelet back on. They soared again.

In an email, HealBe told me that they are still conducting research to substantiate the legitimacy of the Flow technology, and they they plan to demonstrate the GoBe before an audience later this month.

“New ideas are often met with skepticism,” the company told me. “We anticipated critics when introducing such a groundbreaking device into the market. We understand that ‘seeing is believing’ and expect opinions to change once the device and research results are available.”

I independently contacted a number of experts who specialize in metabolism, and none could vouch for the science behind the GoBe.

“While the idea is laudatory, it seems primitive and lacks appreciation of the body complexities (not even commenting on the fact that we are all different),” said George Grunberger, an endocrinologist who runs a diabetes center in Michigan.

Yoni Freedhoff, a weight-management specialist and an assistant professor of family medicine at the University of Ottawa, said in an email:

Even were GoBe to beat the odds and truly deliver what would amount to be a world-changing technology, the leap from the measurement of blood or cellular glucose to its translation into calories consumed is about as probable as a human powered leap across the grand canyon. Simply put, not only would the algorithm required to deliver those results differ between individuals due to variations in insulin sensitivity, they would even differ within individuals depending on the composition of the foods they consumed, their activity levels and their body compositions.

Indiegogo contributions are nonrefundable, and the company advises donors to take their refund requests up with the individual start-ups. The Indiegogo rep suggested that donations should not be seen as an exchange of money for a product, per se:

There are many facets to a campaign and crowdfunding is more than just a simple purchase of a perk. What's important is that the campaigner has clear communication during and after their campaign and be in constant contact with their audience. This can help alleviate problems and questions surrounding delivery.

Then again, not all products use crowdfunding sites just to get from idea to iTunes store. Some take their Indiegogo buzz to investors or medical manufacturers in an attempt to drum up larger sums of capital, Haensly said.

Other times, the product changes radically from the time it’s funded to the time it ships.

TellSpec, a Toronto-based Indiegogo campaign, was panned by PandoDaily for claiming it would use a “Raman spectrometer” to use pulses of light to measure the particle density of food on a plate, and thus to calculate its nutritional information. In essence, it would be the GoBe for before you chow down. Drop Kicker and other sites pointed out that Raman spectrometers are enormous and cost tens of thousands of dollars each.

In response to criticisms from backers about the laser it used, TellSpec told me it has since changed the type of spectrometer in the device. In fact, there is no device, unlike what the Indiegogo page would suggest. TellSpec says, “the technology and our proprietary algorithms are complete, the compressing of the technology into its final shell is what still needs to be finalized.” And unlike the Indiegogo pictures, which show a colorful, computer-mouse-sized oval pointing at a tray of chocolate truffles, the ability to read the calories of an entire plate is still “in the future,” the company tells me—the current version would only know how many calories are in your food per gram or per ounce.


Reddit has an ongoing thread of Kickstarter projects that have been cancelled or never fulfilled. Last month Washington state’s attorney general filed suit against a Kickstarted card game that donors say surpassed its goal and was never received. There are also sites where you can buy real products that have their origins in crowdfunding.

Whether the flimsiness of some crowdfunding claims is a problem depends on how you think about crowdfunding. If you see it like some sort of proto-Amazon.com, where people pay to snatch up the hottest new devices, it certainly can feel like a rip-off if a product changes substantially, doesn’t work as promised, or delays its shipping. It’s less painful, though, if you see it as a gift meant to help a scrappy entrepreneur along.

In 2012, Congress passed the JOBS Act, which intended to open up angel investing to small-dollar investors. Previously, only millionaires could buy equity in companies. Experts expect that within a year, though, a new provision of the JOBS Act will allow companies to raise capital $20 or $30 at a time by doling out small slices of equity to people with little net worth. In other words, Grandma can be like Marc Andreessen, investing in companies she likes in exchange for a tiny stake in them—potentially through crowdfunding sites like Indiegogo and Kickstarter.

But the vast majority of startups fail, according to Jeff Stibel, an internet entrepreneur and CEO of the Dun & Bradstreet Credibility Corp. in Malibu, California. “The best investors have a 10 percent success rate with startups. Those are the best of the best,” he said. “The average is one to two percent. Now imagine when naive investors start investing. Most of those are going to fail, and they’re going to fail miserably.”

Stibel predicts that the new age of crowdfunding will be more like Vegas, with the very best startup pickers winning big, and everyone else sinking cash into companies that go nowhere. That’s not to say people shouldn’t invest, he says, just “take more of a lighthearted approach to it. These opportunities are going to be closer to gambling.”

PandoDaily’s Robinson writes that crowdfunded companies could shore up confidence in their products if they would demo them for journalists before they close their campaigns, as one TellSpec-like spectroscopy device did for him recently. He points out that there are now companies that aim to analyze the validity of crowdfunded projects’ claims and to offer insurance in case they turn out to be bunk.

When it comes to health apps, Haensly suggests looking for data, in the form of published studies, as well as a demo depicting a working device. If the company does provide research, make sure it’s a double-blind study to reduce the likelihood that you’re funding a placebo effect. Still, it will be tough for laymen to independently evaluate medical claims, especially when they come in the form of promo videos.

“There’s a reason why medical school takes four years and then a residency,” Haensly said.

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Olga Khazan is a staff writer at The Atlantic, where she covers health.

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