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With $68 Million from Andreessen Horowitz and Kleiner Perkins, Quirky Aims to Disrupt Consumer Products

Members of Quirky’s design team at work.

Quirky has come a long way. Its roots lie in the distracted musings of inattentive high school student Ben Kaufman. Think of him now, instead, as wunderkind inventor. The New York-based social product design company, founded by Kaufman in 2009, last Wednesday raised a stunning $68 million in a venture round led by Andreessen Horowitz, with significant participation from new investor Kleiner Perkins.

The infusion of cash will allow Quirky to continue enabling consumers to help create the products they buy and use. Kaufman, now 25, who sends emails from his iPhone with the signature “making invention accessible … on the go!” takes this mission very seriously. This stamp of approval from two top VC firms gives the surprising Quirky model—in which passive consumer becomes active market shaper—a huge boost in the race towards a new era of manufacturing.

Quirky has already made a name for itself creating useful, well-designed products through social product design. Users submit product ideas online, and the community rates, comments, and votes on which ones should be developed by Quirky’s team of professional engineers, and how. Throughout the process the community continues voting on colors, names, materials, and marketing taglines. Most impressively, every Quirky member who makes a successful contribution to a product’s evolution gets a percentage of profits.

Quirky’s products sell in big-box stores like Bed Bath & Beyond and Target, and generated $7 million in revenue in 2011. Kaufman projects $25 million this year. The company has sold over 1 million products in the past three months.

Quirky Pivot Power

Another thing that makes the process revolutionary is how fast it is—Quirky’s average idea-to-store-shelf interval is 120 days, whereas a typical company takes two years, said Scott Weiss, the Andreessen Horowitz partner who will now sit on Quirky’s board. Popular Quirky products range from the flexible Pivot power strip, to the Cordie organizer that keeps laptop cords from sliding off desks when unplugged, to Digits gloves that allow you to use your mobile touchscreen in freezing weather. “We’ve never run into a new company that’s so innovative,” said Weiss. “They’re doing office products, kitchen products, housewares, and nailing them.”

With this new round of capital, Quirky plans to ramp up the variety and complexity of its product line by launching in 10 to 15 new vertical markets, said Kaufman. Each vertical will include an online community where budding inventors and consumers can talk about what products the world needs—including Quirky Kitchen, Quirky Fitness, and Quirky Outdoor. Another planned vertical, Quirky Green, aims to further the company’s role in eco-friendly products. The objective, Kaufman said, is to find and mobilize already active online communities. “If people are on camping and outdoor blogs, they’re most likely coming up with solutions to solve their problems,” he said.

Creating a range of targeted verticals underscores Quirky’s belief that specialized problems have specialized solutions, and not all inventors notice the same problems or have compatible skill sets. Within Quirky’s current structure, a wide variety of participants get a voice. “When a mom proposes an idea that solves a mom problem, she might get dumped on by tech people in a community who don’t relate,” said Kaufman. “So verticalized communities let people with like minds feel good about the products they’re coming up with. Once you get to a certain size, you have to give people different playgrounds.”

Quirky Digits

Although Andreessen Horowitz’s Weiss had not previously heard of Quirky, he quickly fell in love. “It was a very fast courtship,” he said. “One of the main goals is to get the brand and the story out. They’re not well known on the West Coast but we’re about to change that.”  Joining Weiss on Quirky’s board of directors will be industry star Mary Meeker of Kleiner Perkins. Their goal, Weiss says, is to help scale the company and out-innovate incumbent industry leaders like OXO, Rubbermaid and 3M. With the growth of Quirky’s online community, these giants could be the next victims of technological disruption. “We’ve seen software eats film, software eats transportation—just about every industry,” said Weiss. “Who would have thought that software might now eat Procter & Gamble—that the collective brainpower of the masses can outwit ten engineers.”

Community collaborators reap the rewards. The inventor of the Pivot power strip earns an impressive $500,000 a year, and even the person who came up with the slogan—“Flex your power”—gets $50,000, according to Quirky. “There are people who are going to retire on Quirky,” he said. “A smart person in the middle of nowhere is going to log on and show how far someone with a good idea can go. Once the world gets to know about Quirky, Quirky will get even better.”

But because Quirky’s design process includes highly trained in-house designers and engineers, Kaufman refuses to label it crowdsourcing. “We’re feeding the community designs; they’re responding to them. They’re feeding us ideas; we’re feeding them expertise,” he said. “It’s much more of a conversation, a collaboration, or co-creation.”

Quirky Cordie

When pressed about the kinds of products he envisions coming out of Quirky’s invigorated product creation process, Kaufman said, “We’re working on a big new product—a granola bar machine. It’s fucking unreal. Put whatever dry goods you have in a hopper, hit a button, and out comes a wrapped granola bar.”

Kaufman’s irreverent attitude about creating new products may stem from the fact the he started inventing when he was in high school. His previous venture was the iPhone accessory company mophie, maker of the popular Juice Pack rechargeable iPhone case. In an interview with Techonomy this spring, he talked about the unusual inspiration for his first product.

“I was in the back of math class my senior year in high school trying to figure out a way to listen to my iPod without my teacher realizing I didn’t give a shit what she was saying,” he said. “I went home and prototyped a product out of ribbon and giftwrap and created the first lanyard headphone for the iPod Shuffle. My parents remortgaged their house so that I could go to China and build my first product.”

That product morphed into mophie, so to speak, which became a highly successful maker of Apple accessories like cases, clips and batteries until Kaufman sold it in 2007, at age 20.

That same year Kaufman launched the beta version of Quirky at the Macworld expo, where, instead of showing off a new product, he set up a booth that allowed attendees to invent new products for him. He held a vote on the best community-created designs, and then brought in laser cutters and 3D printers to create an on-the-spot design center. It churned out prototypes for actual products. That was a turning point. “I knew my passion wasn’t developing iPod condoms, it was figuring out how to make invention accessible,” he said.

Quirky’s success suggests the potential for a new wave manufacturing in U.S. (and global) industry. Social product design, rapid development using tools like 3D printing, and agile manufacturing that allows products to be made close to the point of use may become a model for a new wave of productivity.

Quirky successfully demonstrated some of these principles recently in its development of a line of dorm room storage units modeled on milk crates. Quirky’s Crates were the first Quirky product to be manufactured domestically, in New Jersey and Vermont.

Kaufman sees Quirky’s expansion as, among other things, a chance to go back to basics: “The new iPhone is rumored to be changing the dock connector, so all of a sudden we may have to launch an iPhone accessory community.”

Quirky’s Ben Kaufman spoke at Techonomy Detroit on Wednesday, Sept. 12, in a talk entitled “The New Face of Product Development: Startup as Industry of the Future.” For complete coverage of the September 12, 2012, conference, click here.

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7 Responses to “With $68 Million from Andreessen Horowitz and Kleiner Perkins, Quirky Aims to Disrupt Consumer Products”

  1. I love that I have one of these products, and never knew the story behind it.

  2. That’s a very impressive business model, but can’t it be easily copied like the Groupon knock-offs?

    • panterosa, says:

      @wmoug:disqus I have been the frustrated person harping on lean product development model on AVC. I understand that AVC is interested in platform and network, mainly non-product sphere, since it revolves mainly around @fredwilson interests. But I feel so many lean thinking ideas and models come from the AVC conversation which should be applied outside that sphere.

      Quirly is exactly the kind of model and kind of company I have been looking to gain traction for a while. Shapeways is not yet designer friendly enough, nor maybe will it ever be for someone like me. I liked OpenInvo, but they rely on the slow development model and feeding the P&G’s of this world.
      As a designer who has many production level ideas, and who does NOT want to run a company, Quirky is he exact place to test ideas and have the good ones made fast. Not every one wants to build or run a company. That should not conflict with having a revenue model based on ideas produced and royalties from those ideas to comprise it’s own revenue model. I am so happy to see that Quirky will grow. I will now send in my many ideas which are too cumbersome to shop around, and which I have no interest in producing myself.
      There are great designs which can reach market quickly with the crowd designing aspect of Quirky. That makes my day.

      A+ for Engagio’s morning email – it is my #1 discovery outside of AVC and Disqus

    • none says:

      Anybody can emulate Quirky’s social approach – just fake it. (Every Quirky product is picked by one or two staff members.) Does Quirky want to use a social approach? Sure. Will they eventually? Hope so. But, right now, it’s all smoke and mirrors.

  3. So simple and yet so clever…..

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