Being an entrepreneur is hotter than ever. Individuals are starting to realize that global economic forces are abound, and that the sanctity of a traditional office job with a pension may be a relic of the past. TV shows like Shark Tank and Dragon’s Den only fire up people’s desire to take the crazy ideas that they’re conjuring up in the shower, or while daydreaming at their desk, and turn them into a viable business. Unless you’re Kevin O’Leary (one of the judges on both Shark Tank and Dragon’s Den), it’s hard to find the money, resources and skills to take an idea and bring it to fruition. Even if you have thought about posting an idea on crowdfunding platform like Kickstarter, there is a massive challenge in fulfilling on the promise if your project actually gets funded. People who have great ideas tend to not have all of the necessary skills to bring that idea to market… until now.
Unlike Kickstarter – where individuals post their business ideas and offer the opportunity for people to back the project – Quirky takes innovation and collaboration to a whole new level. Launched in 2009, Quirky is an industrial design company located in New York that launches two new consumer products each and every week. Individuals pay ten dollars to submit their idea to Quirky and the community (that’s you and I) choose which are best via their online channel. But, it doesn’t end there. The community is responsible for truly collaborating and innovating on the products as well. With over 260,000 community members, everything from color schemes and nomenclature to enhancements are all active components of being a good community citizen. What do great citizens get in return? Money? Royalties? Fame? Yes… all of the above. Quirky commits to producing the product and ensuring that it’s ready for prime time. To date, they have launched close to 230 products with close to 190 retail partners (including Target, Staples, Amazon, Bed Bath & Beyond and more). They have paid out over two million dollars in royalties to inventors and collaborators, and even had time to produce a hit reality television show about their business called, Quirky, on the Sundance Channel.
It gets better… and bigger.
This past week, Quirky got even more attention when it raised another $68 million in funding that was led by two of Silicon Valley’s most recognized venture capital firms: Andreessen Horowitz and Kleiner Perkins Caufield & Byers. In total, Quirky has raised close to $92 million in financing. If that’s not impressive for a company that has been in business for a little over three years, try this one on for size: The founder is Ben Kaufman and he is 24-years old. Are you starting to feel old and dated?
A new dawn in product development and innovation.
When product development meets social media, interesting businesses like Quirky flourish. Products like Pivot Power (a flexible power strip that allows you to plug in multiple consumer electronic products) or UnHampered (a foldable laundry basket) can be developed, launched and in-market in short order. More impressively, Quirky shares all of the data and results in near-real time on their website for the world to see. Pivot Power took about one month to develop, has been in stores for 486 days, has sold 336,077 units paying out $376,261.93 in royalties.
Now, you don’t even need to have the big idea.
Quirky is a new and fascinating business model. The inventors are a new and fascinating crew. What makes this platform most interesting is the community. According to The New York Times‘ Dealbook blog post, Quirky Gets Backing From Andreessen Horowitz and Kleiner Perkins, the individual that came up with the Pivot Power’s tagline ("Flex Your Power") is bound to earn more than $50,000 this year for that one part alone (and yes, royalties are paid in perpetuity). How much influence individuals have in the product’s development earns them much more than bragging rights. These individuals (who help make the product better through their online comments and recommendations) are paid a percentage of sales based on their level of influence. So, yes, you can now head over to Quirky and act like the Sharks or Dragons that you see on TV, but you don’t have to open up your cheque book to be a part of the magic. You can simply commit your time, energy and creativity and be paid for it… should the community agree on the value that you bring to the project.
It turns out that your idea and a quarter can get you a whole lot more than a cup of coffee these days.
The above post is my twice-monthly column for the Montreal Gazette and Vancouver Sun newspapers called, New Business – Six Pixels of Separation. I cross-post it here with all the links and tags for your reading pleasure.