Quirky: A Business Based on Making Invention Accessible

Ben Kaufman founded Quirky in 2009 to enable anyone with a product idea to access an online network of people to help evaluate and improve the idea, and potentially bring it to market. By the end of 2012, Quirky was shipping 74 products, and had many more in development. Its products were sold in 35,000 stores worldwide. Each week, the company took three products into the research and development process, out of more than 1,000 submitted online. It paid 10 percent of third party sales, and 30 percent of direct sales, to its community members based on their participation in developing products-more than $2 million in 2012. Despite these signs of success, the company faced substantial challenges. Margins were low, and had to be dramatically improved before the company would become profitable. The product development model, using both online participants and internal staff, was stressed by the ever-increasing number of products being developed. The supply chain, relying on external manufacturing, had to adapt to a continual stream of new products. And retail partners were not well suited to the Quirky model-retailers focused on a few high-selling products. This case describes the business model used by Quirky, and challenges students to address the unique challenges facing the company.