In this blog, I'm continuing my conversation with Matt Barrie, CEO of Freelancer.com, the global workforce site. Here, he talks about how entrepreneurs can use Freelancer to begin or expand their business, or make them much more efficient.Read More »
The Five 'Quirky' Steps to Launching a Great New Product
In this blog, I am introducing you to Quirky, a crowd-powered site for taking new products for concept to production to the consumer in record time. Best of all, the products coming out of Quirky are having extraordinary success. Are you an inventor? You'll want to read this one!
Over the years I've had dozens of consumer product ideas... those ideas that fall into the categories of: "wouldn't it be cool if..." or "I really wish I had a device that would..." kind of ideas. But I never took them forward. Unlike me, Ben Kaufman, the founder and CEO of Quirky, did take his ideas forward -- and then some.
In his senior year in high school, Ben, a self-admitted horrible student, decided he wanted to prototype a device that would allow him to listen to his iPod shuffle in class in a stealthy fashion so his teacher wouldn't notice. He went home, prototyped his device out of ribbon and gift wrap and then, somehow, convinced his parents to remortgage their home and lend him $185,000. After that, he was literally on the next flight to China to figure out how to put his ideas into production and onto the store shelves. Once he got there he realized that creating a consumer product was, in his words, "just f**king hard." Ben continued, "It's not just the money, you need access to industrial design, distribution, marketing, branding, packaging... there's literally a list of 30 things you need to have to be successful." While ultimately, Ben was successful building an Apple accessories company called MoFi (which he later sold), he never forgot his early battles.
Ben's epiphany that ultimately led to Quirky came one early morning in New York. "I was sitting in the subway," he told me, "and there was this woman sitting to my right and she was wearing that product, the product that I had imagined in high school. It was the best feeling in the world to see that."
"In that moment, I realized that I wasn't unique in the fact that I had an idea," Ben continued, "I was unique in the fact that all the circumstances lined up to allow me to execute on that idea. "It hit me that invention is typically inaccessibility and really really hard for people."
So he created Quirky, a company whose mission is to: "Make invention accessible." As Ben describes it, "Make it possible for all people regardless of their love, circumstances and pedigree to execute on their great ideas." Quirky is a company that embraces transparency: it's open-source invention and innovation as a way of bringing great new products to the market quickly.
After he sold his first company MoFi, Ben began work on Quirky. The name came about because, as Ben said, "It's a weird way of looking at product development. We're changing the way that communities interact and what they do online or they're not just finding each other or sharing things, like they're actually building things for each other."
Quirky launched in 2009, and has introduced several hundred products, including a popular flexible power strip called Pivot Power and another based on stackable home-decor crates made from milk crates that students have long used to decorate their dorm rooms. "An invention can go from idea to product to market in as little as four months. At Quirky we're trying to introduce two new products a week," said Ben. "We're going to quickly scale that towards the end of this year, next year to 10 to 15 new products a week."
Some 285,000 people are currently active online contributors on Quirky, contributing their ideas, their insights and their opinions on the viability, marketability of each product and helping to refine each product along the way. Rather than closed-door marketing meetings and design sessions, everything is transparent, available online and open to the public.
Quirky has five key steps that allows it to succeed:
1. The invention. Investors pay $10 to submit a product idea to Quirky (some have submitted hundreds). The ideas are then reviewed by Quirky's in-house engineers and submitted for its 'Thursday pitch meetings.' "People come to the website and they submit their ideas in a very simple format," Ben said. "We usually ask them what problem we're solving, what are their solutions, what are the key features that make it special. Then we might ask them where they got their inspiration and to tell us about the competition."
2. The pitch process. Before an in-house audience of Quirky staff and visitors, and a live web audience, 25 products get reviewed each Thursday. The community votes on all the products, and everyone present votes on whether to add the product to the Quirky design and development process. "The idea is streaming in real time, the community is rating or commenting, enhancing and refining each other's ideas and then, as we get to it, we start to see what the top ideas are in any given week," Ben said. "Every Thursday at 7 p.m. we broadcast live from this office. We have all of our industry experts on a panel, the community is beaming in and we sit there and debate ideas for a good hour and a half. At the end of it we have the two to five products that will then go onto the later phases of the Quirky process."
3. Refinement. "Those later phases are everything from research to industrial design, naming the product, color and material finish," Ben said. "Really, all the different discrete steps to take to make a product real. In each of those phases the community is participating, our expert team is participating and then we sort of figure out the best route is and go forward."
4. Manufacturing. "After we go through all those collaborative phases and then ultimately we manufacture the product and put them in retail shops," Ben said. "The secret sauce behind all of it is: we developed all this technology that keeps track of how impactful each and every community member was over the successful development lifecycle of a product." As a result, each product has a few or hundreds of "owners" who are paid a percentage of sales, with the original inventor getting the largest percentage.
5. Ownership and marketing. "Our average product is 'owned' by 1,200 people," Ben said. "That means every time one unit of a product sells, some 1,200 people get paid -- from dollars to micro pennies based upon the impact and the influence they had over making that product real."
The inventor of Pivot Power, for example, has realized hundreds of thousands of dollars from his invention, with others who contributed to its final design getting a small percentage. "So, instead of one person who created a product -- like me on the subway in New York -- there are 1,200 people sitting on subways or riding in planes and so on, seeing people use the product and feeling that sense of 'I made that,'" said Ben. "And that breeds brand awareness and brings more inventors into the process."
Ben doesn't see Quirky as replacing long-established companies such as Procter & Gamble that have their own brand managers and research departments. Instead, Quirky will complement such companies through its own nimble research, development and launch abilities.
"P&G's business is stable," Ben said. "They're not going away. I think that newness is going to be driven by companies like ours and by the consumer in general. This isn't a new concept. Market research -- that's what I'm doing. I'm just doing it in a way that's full-stack product development baked into market research. P&G is one of the companies that pioneered it," he said.
"One of the things I saw in P&G was that the guys that run the platform where people can submit ideas on P&G don't want to go to their brand manager and say, 'Guess where I got this idea? From the Internet.' They're supposed to be the ones coming up with the ideas."
As Ben said, that kind of brand manager paranoia doesn't exist at Quirky. "As opposed to the P&G example, there is no ego," he said. "No one in Quirky -- community member or a staff member -- cares who figures it out. Our goal is to figure it out, launch it, go to the next thing figure it out and launch it."
In my next blog I'm going to explore how Eric Migicovsky, the CEO of Pebble Watch, CRUSHED all crowd funding records. Eric will tell us exactly how he did it and what he recommends to you!
NOTE: Over the next year, I'm embarking on a BOLD mission -- to speak to top CEOs and entrepreneurs to find out their secrets to success. My last book Abundance, which hit No. 1 on Amazon, No. 2 on the New York Times and was at the top of Bill Gates' personal reading list, shows us the technologies that empower us to create a world of Abundance over the next 20 to 30 years. BOLD, my next book, will provide you with tools you can use to make your dreams come true and help you solve the world's grand challenges to create a world of Abundance. I'm going to write this book and share it with you every week through a series of blog posts. Each step of the way, I'll ask for your input and feedback. Top contributors will be credited within the book as a special "thank you," and all contributors will be recognized on the forthcoming BOLD book website. To ensure you never miss a message, sign up for my newsletter here.