Not Quirky enough?
Quirky sought to use the crowd to generate product ideas that were implicitly in demand, and then produce those products. But it's hard to get something right on the first try.
In September, Quirky, which ran under the tagline “The Invention Platform,” filed for Bankruptcy. After burning through $180 million dollars on VC from some top tier investors, the company which aimed to use the crowd to source and validate product ideas — sort of a Kickstarter that would pull all products in house — unceremoniously shut its doors.
What went wrong?
The basic insights are solid: by soliciting product ideas from a large and engaged user-base of more than a million community members, Quirky could find and prove (some) demand for all kinds of hardware products, but rather than turn the fulfillment over to the idea’s originator like Kickstarter, Quirky sought to handle the production and marketing of the product internally.
There are two good reasons why Quirky failed as a startup. One is well articled by Ben Einstein on Medium:
Quirky never iterated on its products. I own the first Quirky Aros air conditioner. It wasn’t very good but it was a great idea. I bet the second or third generation Aros would have fixed most of the small problems the product had. Aros could have become a multi-hundred million dollar product on its own but instead Quirky re-focused its energy on coffee makers and pet feeders and 50 other things.
He makes a great point: first versions of products are rarely breakouts. Popular theory in Silicon Valley these days encourages startups to build a “Minimum Viable Product,” and push it into the market in order to test its viability as quickly as possible — and the necessary next step of course: make changes and re-release.
The other good reason is that Quirky didn’t go far enough with the crowd.
The Founder, Ben, told Business Insider that “it didn’t scale.” He was right — but the crowd does scale. Imagine if, instead of trying to ingest 50 or more products per year, Quirky instead took an organizational oversight role, coordinating teams much like Hyperloop Technologies (another blog post? anyone? Bueller?) then the product design, production, and iteration process would have scaled like the rest of it.