Apr 07 2014

Crowdfunding Pseudoscience

Indiegogo is rapidly earning a reputation for not caring whether or not they fund pure pseudoscience. This, in my opinion, is a bad business model, not to mention morally dubious.

I wrote previously about an Indiegogo campaign to fund a free energy device – a “home quantum energy generator.”  Indiegogo claims to have a process to weed out fraud from their campaigns, but this one apparently slipped through their process. When I e-mailed Indiegogo to question them about this campaign, I received nothing but a generic response.

Now pandodaily has been covering a new Indiegogo campaign for a “miracle” device – the GoBe by Healbe. The company claims on their Indiegogo page:

GoBe is the only way to automatically measure calorie intake—through your skin. Simply wear it to see calories consumed and burned, activity, hydration, sleep, stress levels, and more, delivered effortlessly to your smartphone.

They have raised almost a million dollars. Pandodaily has done a great job of investigating the company. It looks as if they are a Russian company with a minimal footprint in the US. They have no patents, have not published any data, and have no history of producing real medical devices. No one outside the  company has seen or tested a working prototype. Read the article for all the sordid details. I want to delve a bit further into the alleged science behind their claims.

One huge red flag for any scientific claims – especially one involving a working device – is when there is no trail of scientific progress leading up to the alleged device. Scientific advances tend to proceed through necessary steps. You have to establish the basics before you get to the more advanced applications.

For anyone following a particular scientific field you can see the paper-trail of a scientific advance as each incremental step is published and debated by the community. It’s a dynamic process. When a company or researcher claims to have made a breakthrough that is many steps ahead of the public transparent science, this is a red flag. Companies coming out of nowhere with advances that are 10-20 years or more ahead of their time is the stuff of movies, not reality.

In this case, what exactly is Healbe claiming? They claim to use a small wearable impedance device to measure water and glucose levels inside cells. With this information they employ an algorithm (in other words – a black box) to somehow calculate total calories consumed and burned by the wearer. These claims involve multiple highly unlikely advances.

The basic claim is that the company has developed a non-invasive method for measuring blood glucose. If this were true, why wouldn’t they market it first just as a glucose monitor for diabetics? They could then use the millions they would make to develop the specific application they are now claiming, to calculate caloric intake and burning.

There are multiple companies working on non-invasive glucose monitoring. The most promising approach seems to be near infrared technology. An Israeli company, for example, claims to have such a device but it is not yet on the market. We do seem to be on the brink of such devices coming out, but it will likely take several years for them to be properly tested and receive approval.

Healbe claims to use a different technology, impedance. There is also research into impedance spectroscopy to measure blood glucose, but this is the less promising technology. Such devices are more cumbersome, less accurate, and require calibration to the specific patient.

If measuring blood glucose non-invasively were the extent of the claims, I would be highly suspicious – such claims are not implausible, just a bit ahead of schedule. My suspicions would be based on the lack of a paper trail. For the other devices we have published studies with actual data.

This is a common scam – take an emerging technology for which there is already some buzz and simply claim to have developed it fully. There will be a lot of basic science papers you can point to in order to lend credibility to your claims. The technology is obviously plausible otherwise scientists would not be talking about it. The scam is simply pretending to have leapfrogged 10-20 years ahead of all the competition. We are seeing this now with all the fraudulent stem cell clinics popping up.

We are not done with the GoBe, however. The real implausibility here is that the company claims to have developed an algorithm to extrapolate from water and glucose level measurements to total caloric intake and output. For this claim the basic science simply isn’t there.

Caloric intake comes from carbohydrates, proteins, and fats. Glucose management in the body is a bit complex, and blood glucose levels are just one factor. There are lots of other factors, including fat storage, liver storage of carbohydrates, insulin levels and resistance, and metabolic rate.

Being able to estimate total caloric intake and output from water and blood glucose levels, if this is even possible, would likely require decades of research to sort out all the variables. This would like require a collaboration among many researchers and institutions, and we would be seeing hundreds of published papers establishing the basic knowledge necessary for such technology.

Put simply, this is not the sort of thing that is going to come from a previously unknown company in Russia with no track record of producing such technology, let alone conducting the necessary biomedical research.

The only conclusion I can come to is that this device is a total scam. The chance of it doing what it claims to do is practically zero. It’s possible the company believes they have a working device and are just scientifically illiterate and deceiving themselves. It’s also possible they have realized that crowdfunding campaigns are the perfect scam.

This leads us to an important question – what is the responsibility of sites like Indiegogo to protect their users from fraud? We can argue the ethics of this endlessly. Should the buyer beware, or does Indiegogo have a responsibility not become accessories to fraud? But here’s the thing – Indiegogo claims to protect their users from fraud. They write:

Indiegogo has a comprehensive fraud-prevention system to protect our users. Campaigns and contributions that have been flagged by our fraud detection system go through a thorough review. If we find fraudulent contributions on your campaign, we may remove them from your campaign.

Whether or not you feel they should protect against fraud, they claim that they do. Clearly, however, they are not doing a great job. In addition to funding a fake free energy device, they are now on the brink of funding a fake health monitor. Pandodaily also points to another dubious medical device funded through Indiegogo,  a small device the manufacturer claims can detect the nutritional content of food. The device, however, cannot possibly work as described.

Crowdfunding is new regulatory territory. Medical devices need to be approved by the FDA, and marketing claims can be reviewed by the Federal Trade Commission. Do either of these agencies have any power to regular a crowdfunding campaign, even if it is for a medical device? Are crowdfunding campaigns commercial speech regulated by the FTC? I have inquiries out to both agencies to get their opinions.

Meanwhile Indiegogo is clearly failing to live up to their claims to protect their users from fraud, at least in the cases I discuss above. There is still time to do the right thing for the GoBe device as the funds have not been released. So far Indigogo says everything is on the up and up. I predict if they release the near million dollars to the company the funds will disappear into a Russian bank and we will never see them again.

Share

7 responses so far

7 Responses to “Crowdfunding Pseudoscience”

  1. oldmanjenkinson 07 Apr 2014 at 10:02 am

    This is the same tongue and cheek used by Lumosity. “It’s based on neuroscience” claims the commercial. “Neuroplasticity” they say. Well sign me up! I’m amazed they have raised almost a million dollars. Barnum was right, one is born every second.

  2. locutusbrgon 07 Apr 2014 at 11:54 am

    @oldmanjenkins I too am always galled by the oft used statement in those luminosity ad’s, “Using the science of Neuroplasticity”.

    Maybe I am naive here Steve but if they make specific claims like this wouldn’t this be a issue in the US. Meaning that they couldn’t avoid this being a medical device which would require research. I mean Glucometers have to have testing right or is it more like the calorie count on the machine at the gym(fast and loose with the accuracy)?

    Crowd-funding is international, is it really becoming a throw anything against the wall and make it stick? Then maybe like all other concepts that are a good idea that is being perverted to an evil purpose. Like the internet and the distribution of Child pornography.

    TO me this is like Day Trading you invest your money in something that you have no real knowledge about you takes your chances as the saying goes. It doesn’t make it right. In the end they could take the million and walk away. I guess that is why I have always been very skeptical of handing money over to someone you know nothing about.

  3. practiCal fMRIon 07 Apr 2014 at 12:48 pm

    Yes, there is something wonderfully naive about new business models, especially online ones. My strong suspicion is that if companies don’t self-regulate (unlikely) and if the appropriate regulatory agencies don’t act because they don’t yet know how to, then it will be settled first in the courts. People will sue those who have the money. After which, nuanced regulations will be written to include the new business models as versions of the old ones. It happened with online shopping and sales tax, it’s happening with private ride share services such as Uber and Lyft, and very soon it will begin for crowdfunders. The more successful the crowdfunders become, the faster the lawsuits will come and the quicker new regulations will follow.

    As for Lumosity, don’t get me started! I have listened to their ads very carefully and they do a masterful job of obfuscation. Their latest: “Used by 50 million people worldwide.” Oh then it must be good! Their own success at conning the first wave is being used to con the second! Genius! Sadly, however, I don’t see Lumosity running the same risks as crowdfunders. At the time of writing it is hard to predict what actual harm will come from using Lumosity products. And they are far too clever to claim any real therapeutic benefit (afaik). So until the crowdfunding theater starts I’ll have to content myself with watching Uber and Lyft dodge taxi regulations while being sued for accidents related to their drivers. I’ve always thought the pink mustache would make a fitting icon for Dotcom Bust 2.0, as the Pets.com sock puppet was a decade-and-a-half ago.

  4. roadfoodon 07 Apr 2014 at 1:27 pm

    I normally don’t call out typos, but “sorted details” where I believe you meant “sordid details” is just too funny. Yes, I know, not the first time that particular one has been made, but an unexpected laugh in the midst of an otherwise serious article. Unless it was intentional and I’ve been whooshed?

  5. roadfoodon 07 Apr 2014 at 2:07 pm

    Am I having English comprehension problems today? The excerpt about fraud that Steve quotes from Indiegogo says, “If we find fraudulent contributions on your campaign . . .”. When I read that, it does not say anything about a fraudulent claim made in a campaign, it refers to a contribution made to the campaign that is found to be not a legitimate contribution. The implication I read is warning campaigns not to “pad” their contributions with shills in an effort to make the campaign look more popular.

    Reading further into the Indiegogo page, quite the opposite from protecting contributors from fraud, they seem to cover their own ass by saying:

    “Like anyone contributing to an early-stage project, you accept the risk that the project might not come to fruition. We leave it up to you to make your own judgment about the merit of a campaign before making a contribution.”

    They provide a way to report a fraudulent campaign, but they don’t define what “prohibited content” is, either on that page or on the “How to Evaluate a Campaign” page.

  6. Teaseron 07 Apr 2014 at 2:58 pm

    Crowd funding allows them to finance their business in a “no questions asked” scenario.

    As such they are able to bypass the tough questions that any experienced venture capitalist would ask. The crowd-funding investors have no voice or input other than their cash.

    Additionally it seems that mobile app health tracking products like Fitbit are outside the realm of the FDA approval.

    The FDA said it will focus on:

    “Apps intended to be used as an accessory to a regulated medical device – for example, an application that allows a health care professional to make a specific diagnosis by viewing a medical image from a picture archiving and communication system on a smartphone or a mobile tablet.”

    “Apps that transform a mobile platform into a regulated medical device – for example, an application that turns a smartphone into an electrocardiography (ECG) machine to detect abnormal heart rhythms or determine if a patient is experiencing a heart attack.”

    http://www.bizjournals.com/sanjose/news/2013/09/23/fda-details-what-health-apps-it-plans.html

    http://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/ucm369431.htm

  7. Gallenodon 08 Apr 2014 at 3:17 pm

    In 1999, while researching for an article I published on Internet frauds and how to recognize them, I came across this gem:

    http://www.scambusters.org/Scambusters33.html

    From the Scambusters link:

    “The Australian National Securities and Investment Commission created a bogus “Millennium Bug Insurance Company” online as an April Fools joke in order to test the gullibility of the public. They offered blue chip companies insurance against losses caused by the Y2K bug. But more important, the site solicited investments in the “company” from Internet visitors.

    “The site had more than 10,000 visitors – and 233 people offered to invest a total of $4 million in the bogus company!

    “On April Fool’s Day, the investors were told the truth: that the Web site was part of an elaborate scam to teach investors to be more cautious.”

    Fifteen years and innumerable publicized examples of similar fraud later, people are still falling for this stuff, suggesting that perhaps having opposable thumbs had more to do with us reaching the top of the food chain than our species’ cognitive abilities.

Trackback URI | Comments RSS

Leave a Reply

You must be logged in to post a comment.