Five Years Too Late

April 9, 2010

Quirky

Filed under: Uncategorized — fiveyearstoolate @ 8:15 am

Yesterday Quirky, Inc. announced its Series A funding, and I’m delighted to welcome Ben, Mitch and Team Quirky into the RRE family.

Quirky is a social products company, built on the idea that lots of people have great ideas but don’t happen to work inside of a consumer products company. We think that basic observation is correct – the majority of the world’s creative people, including those interested in creating great products, don’t work inside of the design department of the handful of large CPG companies.

But let’s step back and think about why this matters. Much of the last fifteen years of IT innovation has been geared toward using the internet’s capabilities to do things in better, faster and cheaper ways than were possible in the offline world. We communicate with each other, consume and produce media, share content, play games, do work, collaborate, etc… The internet dramatically changed all of these things. Quirky applies the transformative nature of the internet to the creation of consumer products.

I first met Ben Kaufman a couple of years ago when he first launched “Kluster”, a platform that enabled people to collaborate, but also had a system for measuring influence and attributing the final output to those who’d shared in its creation. I liked Ben and thought Kluster was cool, but it wasn’t clear to me what it was actually for. When he came to RRE talking about Quirky a couple of months ago, it was clear that this was the fit he’d been looking for – using a community to collaboratively design actual products. And there could be no more “native” investor for this company than Jim Robinson IV, who is as devoted a hobbyist as I’ve ever met, who builds things all the time, and who I knew would immediately start submitting his OWN ideas to the Quirky community (note: he already has one product in pre-production and I’m sure more are coming).

It made perfect sense to us. Almost everyone you know has that idea they think would just be HUGE if they could actually get it made. Only most people can’t get it made. They can’t do the industrial design, the marketing, the manufacturing or the distribution. And that’s why we think Quirky is so potentially powerful. There are people ranging from pure hobbyists to people using their professional skill on the side who can do ALL of these things. They just don’t all work in the same place. Quirky uses these distributed resources (plus Kluster’s collaboration engine) to crowdsource all the elements of product creation. Then the company uses its own expertise (Ben started and ran a significant company called Mophie that manufactured consumer products when he was 18) to gear up manufacturing and arrange for distribution. The profits are shared not just with the original inventor, but with every person who contributed in a variety of ways to the product’s ultimate outcome.

Quirky’s community will design 50-60 products a year. Some of them won’t ever actually be produced, others will sell a few thousands units, and others will wind up being major sellers. We are excited about the possibilities that emerge when you let regular people exert their influence over real products. We think some really interesting things are going to come out of Quirky’s process and we couldn’t be more excited to work with Ben, Mitch Lowe (who has joined as chairman), the Quirky team and the whole Quirky community to create the next great consumer products company. If you ever had an idea that you thought a lot of people would want, come on by and submit your idea. It’s only $99…

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3 Comments »

  1. Congrats on the investment, guys.
    Quirky is definitely cool and great explanation of your investment thesis, which seems sound.

    My only question was, $99 seems like a pretty steep fee. That is a lot of money to most people, you can buy an iPhone 3G for that. Obviously the benefit is good revenue to the company plus a massive filter to keep noise down.
    In any case that seems like a key lever to monitor… maybe there are 5 mega-hit products where the inventor would only part with $49, so it might be worth trading some fee revenue for product-success revenue- but I’m sure Ben and team have studied this curve.
    The other idea would be a couple of steps e.g. $49 for “basic” submission and $99 for some form of preferred placement.

    Cool stuff, will definitely keep an eye on the products coming out.

    Comment by Roy Rodenstein — April 9, 2010 @ 10:16 am

  2. Roy – fair question. I think you cite the answer as well, though – signal to noise ratio. Imagine if there was no submission fee at all – how many submissions would Quirky get for time machines, jet packs, etc…? My view is that the community product evaluation process would break down if the signal to noise ratio dropped below a certain threshold.

    Does that mean $99 is perfect or that there couldn’t be a tiered system like you suggest? Not necessarily. I think it bears observation. My intuition, however, is that if someone has been coming up with a really great product for a long time, the $99 isn’t really an impediment to putting it into the process.

    Comment by Eric Wiesen — April 12, 2010 @ 8:48 am

  3. I’m not suggesting Mophie Juice Pack, I’d rather us Apocket, here is the reason
    Mophie Juice Pack:
    weight 1lbs price $75 capacity 1300mAh

    Apocket1750:
    weight 0.4lbs price $59 capacity 1750mAh

    Apocket2000:
    weight 0.4lbs price $89 capacity 2000mAh

    Comment by Iphone Battery Extender — August 17, 2010 @ 9:49 am


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