Quirky innovation company is too good to let fail

j2condon    October 19, 2015

Organization Name :  Quirky

quirky logo



Industry Name :  Crowd Sourced Innovation Company

Founder & CEO : Ben Kaufman  ( no longer with company )

Web References :   london.edunytimes.com, quirky.com, forbes.com, fortune.com


” Innovation is the only insurance against irrelevance.  It is the only guarantee of long term customer loyalty and the only strategy to outperform a dismal economy. ”  

This quote comes from Gary Hamel , a global thought leader who the Wall Street Journal has called one of the world’s most influential business thinkers.  As part of a recent Hamel Innovation Academy, he spoke about a company called Quirky that was providing a social platform for innovators to share ideas and new product inventions. Hamel was high on this company for finding a new way of bringing innovation to inventors and to him, nothing is more important than finding ways to unlock innovative thinking.

A Very Quirky Story

I am a big believer in what Quirky stands for and built a business around. That innovation drives the world and can come from anywhere. Forward thinking company with a young confident and articulate leader committed to building a platform that allows entrepreneurs to share their ideas.  Very interesting five year whirlwind run for this company that showed how social media can and will change the product design and development cadence moving forward. Spoiler alert : these guys were rock stars but fell from grace and filed for Bankruptcy Protection in Sept 2015.  If some companies are ” too big to fail” then I would suggest ” Quirky is too good to fail “.  There are lessons to be learned about the business of crowdsourcing here.

Founded in 2010 by Ben Kaufman, a 23 year old entrepreneur with one successful start up already under his belt. He first designed new Ipod  accessories branded Mophie that won Best of Show award at Mac World in 2006.  The kid who couldn’t pay attention in high school and dropped out of college was just getting started.

For Mac World 2007, Kaufman flipped the classroom.  Instead of bringing his new innovation concepts to the show,  he set up a booth armed with note books and pens encouraging the crowd to invent and design his new 2007  product line up. By the end of the four-day show, using a 3-D printer Kaufman and team had roughed out prototypes of the winning sketches submitted.

The Big Idea

This was the start of what would become Quirky.  Kaufman  dubbed it ” a modern invention machine ” with a company motto of  ” we make invention accessible “. 

Kaufman felt great ideas came from the minds and living rooms of every day inventors  ( the idea community )  who just needed a platform to make these ideas come to life.  What these creators needed were experts who would deal with all the back room stuff required to build out their idea or invention.

So the Quirky team set out to build a social platform that made it easy for innovators to share their ideas. Just describe the problem you are solving,  sketch out the product / idea that will become a useful solution for consumers and submit it to Quirky for their review ( $100 cost to submit ).   Those ideas that Quirky employees felt had the most potential became shared property of the inventor and Quirky. Inventors knew their royalty split if Quirky succeeded in getting the product to market.

In 2010, crowdsourcing was not a new idea.  Kaufman’s findings at Mac World 2007 under a small sample environment made him a believer in the power of community.   How Quirky tweaked crowdsourcing content was to bring expertise to the community generated ideas.  Here is Kaufman’s position expressed in an interview with Forbes.

Why don’t you like to call it crowdsourcing? “

Fundamental to that term is the notion that the community is smarter than the experts, that you can do better by just pulling from the community and forgetting about what the experts say. That is not sustainable. It doesn’t work and it creates fatigue within the community and within the company. What we do is both push and pull. We’re feeding the community designs; they’re responding to them. They’re feeding us ideas; we’re feeding them expertise. It’s much more of a conversation, a collaboration, or co-creation.

Image result for quirky invention company

Quirky NYC Office

 Cool Space

Engaged Employees

Hot Brand

 Big Ideas

Quirky Developed Believers






The Results
The top line market response to Quirky business model was impressive and Kaufman was seen as one of the lead young entrepreneurs in the social space.

  • Quirky was privately held company but, as per Kaufman,  2014 sales of Quirky designed & branded product had grown to $100MM –  the Quirky brand was available in 30 countries & sold  by national retailers like Bed Bath & Beyond, Target, Home Depot, Amazon
  • Quirky had received outside financing of $185MM from venture capital investors including $30MM from General Electric who wanted in on the community crowdsourced idea bank that Quirky could deliver
  • The community of inventors had grown to 1MM +, submitting 3000+ ideas per week and Quirky had approx. 300 employees
  • Quirky had commercialized over 400 products and were developing 3 new products per week –  that is innovation on steroids
  • Quirky had developed partnerships with leading global brands like Mattell ( toys ) , Harman ( head phones ) and a major collaboration with GE focused  on Smart Home Mobile Connectivity.
  • The company had created a new division called Wink to target the growing Smart Home market and were aligned with GE on this project.  Bringing Quirky’s rich talent pool of inventors to major brands seemed a natural evolution in aligning resources and sharpening focus on what products had greatest market potential
  • Quirky had quantified what speed to market could look like on the Link Light Bulb project with GE.  From initial design to shipping to retailers in 100 days – compared to typical 12 month product development lag


Kaufman Interview with Fox Business News – April 28, 2015

So Why Did Quirky Fail 

  • Quirky burnt through the seed investment capital quicker than it could create necessary profit margins on new innovations – bringing innovation to market takes time even when it is the foundation of your business
  • To land orders from big box retailers, Quirky margins were squeezed – this should not have been a surprise as the retail margins required to do business here leave tight profit margins for the vendor selling into big box retail –  while key to get brand visibility through chains, profit margins rule & this was key miss by Quirky team in start up mode
  • Quirky made a big bet on Smart Home business powered by mobile technology –  this category is growing and will be big business but did not accelerate fast enough for Quirky –  note that the Wink Division of Quirky already has firm offer to buy commitments from the market
  • In hind sight, Quirky stuck to its core strategy too long and did not shift focus from making products to partnering with existing brands to help speed their innovation process through access to Quirky innovation crowd
  • Quirky’s initial fail raises questions on the business metrics of crowd sourced business.  The adjustable power strip called Pivot Power was a big commercial success but there were many products with marginal success. The Quirky “ crowd “ is a community of inventors.  They may not always be best barometer of mainstream consumer buying habits.  Unfortunate for Quirky but lesson learned, that innovation alone does not create market demand.

Quirky was profiled in an excellent New York Times article in Feb 2015.  The author insight and comments from Quirky’s charismatic leader Kaufman would now seem foreboding.

Mr. Kaufman, an impresario of open innovation, offers a perspective informed by firsthand experience. Community-based innovation, he says, is surely a huge asset in finding ideas and in guiding decisions on a product’s price, color, name and design improvements. Truly original ideas or complex engineering challenges, he notes, tend to be the province of inspired individuals or dedicated small teams of people.

Crowdsourcing, Mr. Kaufman said, is “a tool, not a silver bullet. I look at the community as a way to have a broader conversation about how to make great products and better decisions.”

In short, be guided by the crowd, not ruled by it

Quirky is or was a very cool platform to encourage people to share ideas.  Reality dictates that a business must deliver profit to survive. This is a case where we need a forward thinking leader with deep pockets who has the vision to see what organizations like Quirky have the potential to create.   Companies like Quirky can bring real change and add real value to people’s lives around the world.

Hope we see Quirky 2.0 soon.

To contact author of this entry:  johncondon21@gmail.com

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