Using crowdsourcing for product development
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Ben Kaufman’s start-up – based in a loft in downtown Manhattan – is anything but ordinary. You might even call it quirky and that is just what he did.
The company’s motto? “We make invention possible.”
Quirky is a consumer products company that takes inventors’ ideas, taps into the power of web-based crowdsourcing to seek the views of its user community and selects two ideas a week to design, manufacture and sell online and in stores like Bed Bath & Beyond and Radio Shack. Mr Kaufman, 24, calls it “social product development”.
The company’s most successful product to date, a $29.99 flexible power strip called ‘Pivot Power’ invented by Jake Zien, has sold almost 40,000 units since it went on sale a year ago and earned Mr Zien and the 855 members of the Quirky community that helped influence and design the product more than $13,500.
Mr Kaufman discovered his entrepreneurial spirit during his senior year in high school, setting up an iPod accessory business he called ‘mophie’ with funds supplied by his parents who took out a second mortgage on their New York house. Mophie went on to win ‘Best of Show” at MacWorld 2006 and was sold in August the following year to Michigan-based mStation, enabling Mr Kaufman to focus on an idea that came to him while travelling on the New York subway.
“I looked to my right and saw this woman who was wearing my product,” he says, “it was the best feeling in the world – that I made that, and I wanted to take that feeling and give everyone a chance to have an opportunity to bring their product to market without having to have crazy parents who remortgage their house to get it.
“For centuries it has been really, really hard to make stuff,” he says. “You need to have access to capital, you need to know the right people, you need to be multidisciplinary between design and engineering, manufacturing and merchandising, and all these things need to come together just to push one new invention or innovation out into the world.”
Using the proceeds of the sale of mophie and “several million dollars” of venture capital, Mr Kaufman publicly launched Quirky in June 2009. “We started out really small, just a few of us in my apartment and now we are about 50 people here in New York and we have offices in Hong Kong and Shenzhen, China.”
The employees include software developers, lawyers, product designers, marketing experts and prototype builders who have access to a $250,000 printer nicknamed ‘Bertha’ that sits in the back of Quirky’s Manhattan loft and builds 3D models in plastic.
So how does Quirky work? Each week hundreds of wannabe inventors pay $10 each to submit their ideas to Quirky’s website. Mr Kaufman explains that the $10 filing fee is there to discourage time-wasters, not to raise funds. Members of the 57,000-strong Quirky social network are then invited to suggest improvements, comment and finally to vote on the idea.
The best five or six ideas move to the next stage where Quirky employees evaluate the idea based on its design potential, marketing potential and viability. Each idea receives a score and the highest scoring idea becomes Quirky’s next product. The latest products include a new take on the can opener called ‘Apri’, an adjustable height pedestal dog bowl and a collapsible watering can that is still in the evaluation phase.
Inventors and ‘influencers’ – those Quirky members who helped shape the original idea – share a slice of revenues garnered from online and retail sales, with the inventor receiving “the lion’s share”. As a private company, Quirky does not reveal its financials, but Mr Kaufman says the Quirky community will make more than $1m in revenue this year. On average, between 700 and 800 people share in the pay-out on each product unit sale.
“The world influences our business in real-time, and we share our revenue directly with the people who helped us make successful decisions,” says Mr Kaufman.
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